JAN  3  1  1964 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 
LOS  ANGELES 


National  Industrial  Conference  Board 

IS  BEACON  STREET,  BOSTON,  MASS. 


BRANCH   OFFICE 
724   SOUTHERN   BUILDING,    "WASHINGTON,    D.  C. 


THE  National  Industrial  Conference  Board  is  a  co-operative 
body  composed  of  representatives  of  national  and  state  in- 
dustrial associations,  and  closely  allied  engineering  societies  of  a 
national  character,  and  is  organized  to  provide  a  clearing  house 
of  information,  a  forum  for  constructive  discussion,  and  ma- 
chinery for  co-operative  action  on  matters  that  vitally  affect 
the  industrial  development  of  the  nation. 


Frederick  P,  Fish Chairman 

Frederic  C.  Hood Treasurer 

Magnus  W.  Alexander      Managing  Director 


MEMBERSHIP 

American  Cotton  Manufacturers'  Association 

American  Hardware  Manufacturers'  Association 

American  Paper  and  Pulp  Association 

American  Society  of  Mechanical  Engineers 

Electrical  Manufacturers'  Club 

Manufacturing  Chemists'  Association  of  the  U.  S. 

National  Association  of  Cotton  Manufacturers 

National  Association  on  Finishers  of  Cotton  Fabrics 

National  Association  of  Manufacturers 

National  Association  of  Wool  Manufacturers 

National  Automobile  Chamber  of  Commerce 

National  Boot  and  Shoe  Manufacturers'  Association 

National  Council  for  Industrial  Defense 

National  Electric  Light  Association 

National  Erectors'  Association 

National  Founders'  Association 

National  Implement  and  Vehicle  Association 

National  Metal  Trades  Association 

RuuuER  Association  of  America,  Inc. 

Silk  Associatk^n  of  America 

The  Railway  Car  Manufacturers'  Association 

United  TvponiKTi^  ok  America 

ASSOCIATE  MEMBERSHIP 

Associated  Industries  of  Massachusetts 
Associated  Manufacturers  and  Merchants 

OF  New  York  State 
Illinois  Manufacturers'  Association 
Manufacturers'  Association  of  Connecticut,  Inc. 


PROBLEMS 

OF    LABOR    AND    INDUSTRY 

IN 

GREAT    BRITAIN,    FRANCE 

AND   ITALY 


REPORT 

OF  THE 

European  Commission 

OF  THE 

National  Industrial  Conference  Board 


Copyright    1919 


National  Indlstrial  Conference  Board 

15    -Beacon    Street 
■  osTON,  Mass. 


f^:} 


Foreword 

^T^HE  accompanying  report  on  "Problems  of  Labor  and 
-*-  Industry  in  Great  Britain,  France,  and  Italy"  by 
a  special  Commission  of  industrialists  appointed  by 
the  National  Industrial  Conference  Board,  is  the  result 
of  first-hand  observation  of  industrial  conditions  in  these 
countries  during  the  readjustment  period  following  the 
cessation  of  hostilities.  It  was  the  belief  of  the  Board 
that  such  a  report  on  labor  and  industrial  issues  abroad 
would  be  of  direct  and  substantial  service  to  American 
industry  in  the  consideration  of  its  own  problems  of 
industrial  readjustment.  This  expectation,  the  Board 
feels,  is  amply  justified  by  the  report. 

The  Commission  was  composed  of  the  following: 

Charles  W.  Asbury,  Chairman, 

Vice-President    and   Treasurer   The    Enterprise   Manufacturing 

Company  of  Pennsylvania, 

Philadelphia,  Pennsylvania. 

S.  Pemberton  Hutchinson, 
President  The  Westmoreland  Coal  Company, 
Philadelphia,  Pennsylvania. 

J.  Laurence  Laughlin, 

Professor  Emeritus  of  Political  Economy,  University  of  Chicago, 

Boston,  Massachusetts. 

Oliver  S.  Lyford, 
Vice  President  Finance  and  Trading  Corporation, 
New  York  City,  New  York. 

LoYALL  A.  Osborne, 

Vice-President  Westinghouse  Electric  and  Manufacturing  Company, 

New  York  City,  New  York. 

William  H.  Van  Dervoort, 

President  Root  &  Van  Dervoort  Engineering  Company, 

East  Moline,  Illinois. 


1244119 


In  the  course  of  their  inquiries  in  Europe,  members  of 
the  Commission  visited  leading  industrial  centers  in  Great 
Britain,  France,  and  Italy,  and  interviewed  a  large  number 
of  prominent  industrialists,  government  officials,  and  labor 
leaders,  all  of  whom  showed  the  Commission  every 
courtesy.  An  Interim  Report  of  the  European  Commis- 
sion was  published  by  the  National  Industrial  Con- 
ference Board  in  July,  1919.  The  full  report  herewith 
presented  gives,  in  a  more  extended  form,  the  essential  in- 
formation gathered  and  the  conclusions  of  the  Commission. 

The  report  presents  the  findings  of  the  European  Com- 
mission, and  not  an  expression  of  the  official  position  of 
the  National  Industrial  Conference  Board  on  the  various 
vital  subjects  discussed.  The  Board  commends  the  report 
to  the  careful  reading  of  manufacturers  and  business  men 
in  the  United  States,  and  of  students  of  industrial  problems 
generally. 

The  report  deals  primarily  with  the  fundamental  phases 
of  the  various  problems  discussed.  At  the  time  the  Com- 
mission was  making  its  field  observations,  industrial 
conditions  in  the  countries  visited  were  in  a  state  of  flux 
and  some  changes  have  since  occurred.  The  Commission 
has  endeavored,  by  correspondence,  and  by  interviews 
with  prominent  European  industrialists  who  have  visited 
this  country  or  with  American  industrialists  who  have 
visited  Europe  subsequent  to  the  survey  made  by  the 
Commission,  to  keep  advised  of  the  significance  of  these 
changes. 

The  Board  desires  to  express  its  deep  appreciation  of 
the  generous  sacrifice  made  by  members  of  the  Commission 
of  their  time  and  convenience  in  order  to  make  this  in- 
vestigation. It  would  especially  acknowledge  the  valuable 
services  of  Dr.  Laughlin,  who  not  only  carefully  outlined 
the  plan  of  the  investigation,  but  who  is  largely  responsible 
for  the  co-ordination  of  material  and  the  preparation 
of  the  report  itself.  The  Board  feels  that  American 
industry  is  under  a  real  obligation  to  the  members  of 
the  Commission  f<jr  the  services  thus  rendered. 


November  12,  1919. 

The  National  Industrial  Conference  Board, 
Fifteen  Beacon  Street, 

Boston,  Massachusetts. 

Gentlemen:  We  offer  to  you  in  this  book  the  results  of  our 
observations,  interviews,  and  research  on  industrial,  and  parti- 
cularly on  labor,  conditions  in  Great  Britain,  France,  and  Italy. 
The  subject  is  too  vast  to  be  dealt  with  comprehensively  or  in 
full  detail,  but  in  so  far  as  we  have  been  able  to  do  so,  we  have 
given  the  essence  of  the  situation.  Many  problems  suggested 
by  our  investigations  must  be  left  undeveloped;  many  opinions 
and  convictions,  which  we  were  not  able  for  lack  of  time  and 
opportunity  fully  to  demonstrate  by  facts,  must  be  left  un- 
expressed. 

It  is  our  conviction  that  great  new  forces  have  been  let  loose 
on  the  world  which  will  affect  every  phase  of  human  life, 
industrial  no  less  than  political  and  social.  Great  Britain, 
France,  and  Italy  have  been  earlier  and  more  deeply  influenced 
by  these  forces  than  our  own  country,  and  yet  the  problems 
on  both  sides  of  the  sea  are  in  many  ways  strikingly  analogous. 
We  feel,  therefore,  that  it  is  peculiarly  important  for  American 
industrialists  to  know  more  about  these  forces  in  order  that 
they  may  learn  valuable  lessons  from  European  experience. 

Our  industrial  institutions  are  Anglo-Saxon  in  character; 
American  industry  is  a  transplanted  British  industry,  developed 
and  made  unique  by  the  ingenuity,  the  enterprise,  and  the 
daring  of  our  American  pioneer  spirit.  Your  Commission  has, 
therefore,  given  a  very  large  portion  of  its  attention  to  the  labor 
problems  of  Great  Britain.  What  we  could  learn  and  under- 
stand of  the  temperament  and  institutions  of  the  Latin  peoples 
in  France  and  Italy,  that  had  an  interesting  bearing  upon  the 
general  industrial  situation,  has  been  included. 

We  want  to  acknowledge  here  the  honor  conferred  upon  us 
in  being  chosen  for  this  mission.  The  results  of  our  labors 
we  shall  leave  to  justify  themselves. 

It  is  our  desire  also  to  mention  the  cordial  and  generous 
co-operation  which  we  received  everywhere.  Business  men 
and  officials  showed  us  an  earnest  and  sincere  desire  to  help  in 
every  way  possible.  In  many  cases  we  have  expressed  an 
appreciation  personally,  but  we  wish  to  make  this  permanent 
record  of  it. 

Very  sincerely  yours, 

Charles  W.  Asbury,  Chairman 
S.  Pemberton  Hutchinson 
J.  Laurence  Laughlin 
Oliver  S.  Lyford 
LoYALL  A.  Osborne 
William  H.  Van  Dervoort 


Itinerary 

Your  Commission  sailed  March  1,  1919,  and  returned 
May  IS,  1919.  It  visited  establishments  in  the  north  of 
England,  in  Scotland,  in  Wales,  and  in  the  Midlands. 
About  April  1st  the  Commission  went  to  France  and 
studied  conditions  in  the  industries  in  the  neighborhood  of 
Paris,  Lille,  Douai,  Lyons,  and  Saint-Etienne.  Two 
members  of  the  Commission  went  to  Italy  and  visited 
industries  in  Genoa,  Milan,  and  Turin.  In  each  country 
high  officials  and  executive  managers  furnished  freely  all 
available  information  on  the  points  of  inquiry,  and  no 
difficulty  arose  in  seeing  industrial  works  of  all  kinds. 
In  general  it  was  attempted  to  get  the  point  of  view  of 
government  officials,  of  employers,  and  of  labor  leaders. 


CONTENTS 

Chapter  I 
Introduction 

PAGE 

1.  Upheaval  of  War      1 

2.  New  Conditions 2 

3.  War  Debts      3 

4.  Emphasis  on  Labor  Problems      3 

5.  Causes  of  Discontent 4 

6.  Moderate  and  Radical  Attitudes  Contrasted      ...  5 

7.  Collective  Bargaining       7 

8.  "Labor  not  to  be  Treated  as  Merchandise"     ....  9 

9.  Nationalization  of  Industry       13 

10.  Democratization  of  Industry      17 

11.  Organization  of  Material 18 

Chapter  II 
Efficiency  of  Production 

1.  Dependence  of  the  Producer  on  Efficiency    ....  20 

2.  Relative  Costs  in  America  and  Great  Britain  ...  20 

3.  Restriction  on  Output 21 

4.  The  Network  of  Restrictions 22 

5.  Restoration  of  Restrictions 27 

6.  Bonus  and  Premium  Systems 29 

7.  Piecework 31 

8.  Profit-Sharing  and   Education 34 

9.  Attitude  toward  Scientific  Management       35 

10.  The  Coal  Industry 38 

11.  Efficiency  in  Shipyards 40 

12.  Efficiency  in  War  Work      42 

13.  Conclusion      43 

Chapter  III 
Management 

1.  Confused  Talk  on  Economic  Problems       44 

2.  Little  Attention  given  to  Management 46 

3.  Manager  a  Skilled  Laborer 48 

iz 


PAGE 

4.  Directors  as  Managers 49 

5.  Science  of  Management 50 

6.  Labor  demands  a  Share  in  Management 51 

7.  Co-operation  as  a  Source  of  Managers 52 

Chapter  IV 
Organizations  of  Workers  and  of  Employers 

1.  Great  Britain 54 

2.  Education  of  Labor  Officials 59 

3.  French  Labor  Organizations 60 

4.  Italian  Labor  Organizations 62 

5.  Employers'  Associations  in  Great  Britain 63 

6.  Employers'  Associations  in  France 66 

7.  Employers'  Associations  in  Italy      67 

Chapter  V 
Unionism  in  Great  Britain 

L     Present  Tendencies  of  Unionism 68 

2.  Strength  of  Trade  Unions 68 

3.  Lines  of  Development 70 

4.  Industrial  Unrest 77 

5.  Labor  Definition  of  Collective  Bargaining    ....  80 

6.  Conciliation  and  Arbitration 81 

7.  Strikes  and  Lockouts 84 

8.  Attitude  of  British  Employers  toward  Unionism  .    .  86 

Chapter  VI 
Employers'  Organizations 

1.  Basis  of  the  Report 94 

2.  Impulse  toward  Co-operation 94 

3.  Demand  for  Representative  Bodies 97 

4.  Method  of  Association      98 

5.  Federation  of  British  Industries 100 

6.  Other  Associations      103 

7.  Control  over  Members 105 

8.  Functions  of  Employers'  Associations 106 

9.  National  Alliance  of  Employers  and  Employed     .    .  Ill 

10.  Some  Other  Purposes 114 

11.  French  and  Italian  Organizations 116 

12.  Results 119 

13.  Summary 122 

z 


Chapter  VII 

Shop  Stewards  page 

1.  The  Question  of  Outside  Influence 123 

2.  Shop  Stewards 123 

3.  Effect  of  War  Conditions 124 

4.  Attempt  to  Regularize  Shop  Stewards 127 

5.  Expansion  of  Functions  of  Shop  Stewards 130 

6.  Union  to  absorb  Shop  Stewards        132 


Chapter  VIII 
Works  Committees 

1.  Justification  of  Works  Committees  in  Simplest  Form  138 

2.  Kinds  of  Works  Committees 139 

3.  Committees  as  Machinery  for  Settling  Differences  145 

4.  Shop  Stewards  on  Committees 146 

5.  Function  of  Committees 149 


Chapter  IX 
Eight-Hour  Day 

1.  Great  Britain 151 

2.  France      159 

3.  Italy 165 


Chapter  X 
Minimum  Wage 

1.  In  Great  Britain 170 

2.  In  France 176 

3.  In  Italy 178 


Chapter  XI 
Unemployment 

1.  In  Great  Britain 180 

2.  In  France 188 

3.  In  Italy 189 

xi 


Chapter  XII 

Housing  page 

1.  In  Great  Britain 191 

2.  In  France  and  Italy 199 

Chapter  XIII 
The  Co-operative  Movement  in  Great  Britain 

1.  Its  Significance 201 

2.  Types  of  Co-operation 201 

3.  History  and  Progress 202 

4.  Principles  behind  Co-operative  Movement 202 

5.  Entrance  upon  Politics 206 

6.  Relations  to  Labor  Movement 207 

7.  Relation     of    British    and     Russian     Co-operative 

Societies 209 

Chapter  XIV 
Notable  Examples  of  Welfare  Work 

1.  Three  Prominent  Instances  in  Great  Britain     .    .    .  212 

2.  Scope  of  Care  for  Employees 213 

3.  Education  and  Employment  of  Younger  Persons  .    .  214 

4.  Working  Conditions 215 

5.  Wages  and  Profit-Sharing 217 

6.  Hours  of  Labor 218 

7.  Housing 221 

8.  A  French  Example      223 

9.  Criticism      225 


Chapter  XV 
Introduction  to  Political  Labor  Movement 

1.  Function  of  the  State 228 

2.  Political  versus  Industrial  Action 230 

3.  Labor  in  Parliament      231 

4.  Labor  in  the  Cahinet 232 

5.  International  Political  Labor  Movement 233 

0.     Dangers  of  Politics 233 

7.     Plan  of  Discussion 234 

zii 


Chapter^XVI 

The  Whitley  Plan  page 

1.  Precursors  of  the  Whitley  Plan 235 

2.  First  Whitley  Report 238 

3.  Second  Whitley  Report 242 

4.  Third,  Fourth,  and  Final  Reports 243 

5.  Government  Endorsement  of  Whitley  Plan     ....  244 

6.  Aim  of  Whitley  Plan  Different  from  that  of  Works 

Committees 245 

7.  Fear  of  Governmental  Interference      250 

8.  Government  Aid  in  Setting  up  Whitley  Councils     .  253 

9.  Ultimate  Aim  to  Give  Labor  a  Share  in  Control     .  256 

Chapter  XVII 
The  National  Industrial  Conference 

1.  A  Political  Move 258 

2.  Attitude  of  Government  at  Conference 260 

3.  Report  of  Provisional  Joint  Committee 264 

4.  Report  Accepted  by  National  Industrial  Conference    267 

5.  Meeting  of  Joint  Committee,  May  1st .  267 

6.  Criticism  of  Government  Procrastination  by  National 

Alliance 269 

7.  Conclusion      271 

Chapter  XVIII 
Political  Influences  in  French  Labor  Movement 

1.  The  General  Situation 272 

2.  Organizations  of  Employers  and  Employees     ....  275 

3.  French  Labor  in  the  War 279 

4.  Methods  of  Organized  Labor  in  France 282 

5.  Attitude  of  Government  to  Syndicats 285 

6.  Relation  between  Employer  and  Employee      ....  287 

Chapter  XIX 
The  Political  Labor  Situation  in  Italy 

1.  The  General  Situation 293 

2.  Italian  Labor  in  the  War 298 

3.  Italian  Labor  Since  the  Armistice 303 

xiii 


Chapter  XX 

The  International  Political  Labor  Movement  page 

1.  The  International  Labor  Movement  before  the  War  308 

2.  The  International  Labor  Movement  in  the  War      .  312 

3.  The  International  Labor  Movement  and  the    Peace 

Conference      319 

4.  Concluding  Summary 324 

Chapter  XXI 
Nationalization  of  British   Railways 

1.  Introduction      328 

2.  Method  of  Approach      328 

3.  Government  Control  of  British  Railways 329 

Chapter  XXII 
Nationalization  of  British  Coal  Industry 

1.  Introduction      343 

2.  Output      346 

3.  Recommendations  of  the  Commission 362 

4.  Summary 370 


Chapter  XXIII 
Nationalization  of  "Key  Industries" 

1.  Shipping  and  Shipbuilding 373 

2.  Nationalization  of  "Key  Industries" 378 

3.  Significance  of  Key  Industries  and  Key  Men    .    .    .     381 


Chapter  XXIV 
Property  Rights 

1.  Introduction      382 

2.  Social  Legislation  Affecting  Property  Rights  Prior 

to  the  War 384 

3.  War  Measures  and  Claims 385 

4.  Demands  for  Control 388 

xiv 


Chapter  XXV 

Findings  of  European  Commission  page 

1.  Industrial  Unrest 395 

2.  Efficiency  of  Production 395 

3.  Management 396 

4.  Unionism      397 

5.  Employers'  Organizations 398 

6.  Shop  Stewards  and  Works  Committees 398 

7.  Eight-Hour  Day  and  Minimum  Wage 399 

8.  Unemployment 399 

9.  Housing 400 

10.  Co-operative  Movement 400 

11.  Political  Labor  Movement      400 

12.  Nationalization 402 

13.  Coal  Industry 402 

14.  Key  Industries 403 

15.  Property  Rights 403 

16.  Points  to  be  Emphasized 403 


CHAPTER  I 
INTRODUCTION 

§  1.     Upheaval  of  War 

It  was  just  at  the  critical  period  of  readjustment, 
while  the  ravages  of  war  were  still  glaringly  evident, 
while  its  shadow  still  darkened  the  minds  of  men 
and  while  its  passions  still  stirred  their  hearts,  that  your 
Commission  arrived  in  Europe.  It  was  permitted  us 
to  observe  great  peoples  struggling  back  to  a  normal 
living  basis.  Accepted  institutions  seemed  loosened 
from  their  old-time  mooiings;  radical  ideas  were  every- 
where rife;  great  untried  changes  seemed  to  find  almost 
reckless  acceptance.  In  all  of  this  upheaval  of  war,  your 
Commission  has  centered  its  attention  on  economic  pro- 
blems, and  particularly  upon  the  problem  of  industry  and 
labor  as  affecting  the  relationship  of  employers  and 
workmen. 

In  the  countries  visited  it  was  evident  that  the  eco- 
nomic life  of  the  people  had  been  greatly  disturbed  by 
the  war.  Laborers  had  been  withdrawn  from  industry  to 
a  much  greater  extent  than  in  America;  new  laborers,  — 
women,  those  formerly  unemployed,  and  foreigners,  — 
had  been  introduced  to  fill  urgent  needs;  the  working  of 
demand  and  supply  in  all  directions  had  been  interfered 
with;  new  machinery  and  processes  had  been  devised  to 
aid  unskilled  labor;  in  many  instances  labor  organiza- 
tions had  for  patriotic  reasons  given  up  old  restrictions  on 
output;  production  was  shifted  to  the  making  of  muni- 
tions and  articles  needed  for  war;  great  changes  in 
industrial  organization  resulted;  governmental  control  of 
industry  on  a  vast  scale  was  inevitable;  control  by  Govern- 
ment Boards  and  price-fixing  of  most  needed  articles  fol- 
lowed; many  new  factories  were  built  for  war  production, 
and  private  concerns  became  "controlled";  shipping  was 
taken  over  by  the  State;  and  foreign  trade,  both  exports 
and  imports,  commerce  in  food  and  raw  materials,  espe- 
cially in  coal,  became  entirely  deranged.  These  and  other 
considerations  caused  a  mighty  upheaval  in  industry. 

1 


This  industrial  unrest  was  partly  psychological,  partly 
social,  partly  political,  and  partly  economic.  It  was 
psychological  in  so  far  as  it  was  a  nervous  reaction  from  the 
strain  of  long  hours  of  labor,  the  anguish,  anxiety,  and 
suffering  due  to  the  war,  and  the  more  abstract  clash  of 
new  interests  and  ideals  with  old  conventions.  It  was 
partly  social  in  that  labor  claimed  a  new  economic  po- 
sition in  society.  It  was  tinctured  with  politics,  because 
the  greatly  increased  strength  and  unity  of  labor  organiza- 
tions had  caused  socialist  parties  and  political  leaders 
inside  and  outside  of  the  trade  unions  to  seek  their  support. 
It  was  largely  economic  in  that  the  cost  of  living  was 
pressing  hard  upon  the  workpeople  in  spite  of  greatly  in- 
creased wages.  All  in  all,  it  was  a  time  of  violent  readjust- 
ment in  all  phases  of  life. 

§  2.     New  Conditions 

The  fighting  was  some  time  past  when  your  Com- 
mission reached  Europe;  the  problems  of  reconstruction 
had  already  become  practical  issues.  These  problems 
are  not  only  of  tremendous  importance,  but  also  exceed- 
ingly difficult  and  delicate  to  handle.  The  process  of 
reconstruction  needs  time  and  wisdom.  The  long  strain 
of  war  and  of  prolonged  physical  exertion  in  the  shops 
and  offices  has  led  to  an  inevitable  nervous  reaction. 
Irritation  now  develops  on  slight  provocation.  To  this 
have  been  added  difficult  economic  influences,  chief  of 
which  has  been  the  rise  in  cost  of  living  to  over  100  per 
cent  of  pre-war  prices.  While  members  of  different  social 
classes  have  come  to  value  one  another  more  highly  through 
common  service  in  the  trenches,  yet  there  was  evident  a 
tendency  to  settle  back  into  the  old  social  conventions. 
The  laboring  classes,  however,  have  won  new  prestige  by 
valiant  conduct  in  the  war,  and  their  organizations  have 
increased  in  membership.  Then,  too,  it  was  to  be  expected 
that  political  parties  would  maneuver  to  secure  leadership 
over  an  electorate  stirred  by  new  issues.  In  all  these 
countries  political  forces  have  played  a  very  large  part  in 
the  questions  of  labor  and  industry. 

The  (jfn'crnrncnts  were  forced  by  the  exigencies  of  war 
to  deal  with  large  groups  rather  than  with  individuals; 
thus  organization  among  both  workers  and  employers 
was  stimulated.  Organized  labor,  especially  in  Great 
Britain,  has  come  out  of  the  war  greatly  impressed  by  its 

2 


increased  political  and  industrial  power.  A  closer  co- 
operation among  all  the  factors  of  production  was  neces- 
sitated by  a  common  danger  during  the  war.  This  was 
an  element  of  strength  which  in  some  cases  will  continue, 
but  which  cannot  now  be  definitely  counted  upon.  In- 
deed, the  rising  tide  of  discontent  among  the  laboring 
classes  has  been  aided,  no  doubt,  by  an  international 
propaganda  springing  from  extreme  elements  of  disorder. 
New  and  often  extreme  demands  are  being  made  for 
nationalization  of  leading  industries  and  for  a  larger  share 
of  control.  With  industry  crippled  by  the  war,  these 
demands  have  obviously  aggravated  what  must  in  any 
event  have  been,  after  so  great  a  disturbance,  a  very 
difficult  situation. 

§  3.     War  Debts 

Moreover,  the  huge  war  debts  and  the  public  credit  of 
European  countries  touch  intimately  all  industrial  con- 
ditions. Industry  and  employment  of  labor  cannot  begin 
effectively  unless  machinery,  equipment,  building,  and 
raw  materials  can  be  paid  for.  Indeed  matters  of  public 
credit  seem  to  lie  at  the  very  basis  of  early  reconstruction 
and  the  restoration  of  normal  labor  conditions. 

§  4.     Emphasis  on  Labor  Problems 

The  problem  to  which  your  Commission  devoted  most 
attention  was  to  find  the  causes  and  significance  of  that 
great  seething  unrest  among  the  workpeople  of  Great 
Britain,  France,  and  Italy.  The  major  emphasis  is  upon 
conditions  in  Great  Britain,  because  the  problems  there 
are  obviously  most  analogous  to  our  own.  We  found 
that  the  most  significant  aspect  of  this  labor  unrest  and 
its  fundamental  reason  was  the  challenge  being  thrown 
down  to  the  present  system  of  industry.  Labor  is  aiming 
at  a  vast  extension  of  public  ownership  and  a  larger 
measure  of  control  over  the  management  under  which 
industry  is  carried  on.  Through  public  ownership  it 
anticipates  that  the  economic  waste  of  competition  will 
be  eliminated  and,  together  with  the  profits  now  realized 
by  individuals,  will  be  made  available  to  the  workers  in 
the  form  of  higher  wages. 

Out  of  these  demands  has  arisen  the  present  tangled, 
serious,  and  complex  labor  situation  in  Great  Britain, 
France,  and  Italy.     To  the  outsider  its  most  prominent 

3 


characteristic  is  the  large  increase  in  industrial  disturb- 
ances. The  Shop  Steward  movement  is  in  part  responsible 
for  this  in  Great  Britain.  In  France,  the  General  Con- 
federation of  Labor,  with  its  local  and  district  organiza- 
tions, has  become  greatly  active  since  the  armistice.  In 
Italy,  although  only  a  small  per  cent  of  the  laborers  are 
organized,  these  are  dominated  by  extremists.  Here,  too, 
as  is  true  to  a  less  extent  in  France,  the  problem  is  a 
general  social  one  and  is  not  at  all  confined  to  industrial 
questions. 

Statistics  of  disputes  show  that  the  year  1918  was  one  of 
great  industrial  disturbance,  most  of  the  demands  being 
for  advances  in  wages.  The  first  five  months  of  the  present 
year,  however,  have  been  very  much  more  unsettled.  A 
comparison  in  Great  Britain  between  the  first  five  months 
of  1918  and  the  same  period  in  1919  shows  that  disputes 
have  been  25  per  cent  more  numerous,  the  number  of  work- 
people involved  more  than  three  times  greater  and  the 
working  days  lost  more  than  four  times  greater.  Most  of 
these  troubles  have  been  in  coal  mining,  the  engineer- 
ing and  the  shipbuilding  trades.  In  France  and  Italy  the 
strike  curve  has  the  same  tendency. 


§  5.     Causes  of  Discontent 

It  was  obvious  that  there  was  a  widespread  discon- 
tent among  the  workers  in  all  industries  and  in  all 
countries.  Discontent  in  itself  may  not  be  a  sign  of 
danger;  on  the  contrary,  it  may  be  a  healthy  sign  of 
progress,  morally  and  materially,  towards  a  higher 
standard.  With  such  an  attitude  of  mind  there  may  be 
general  sympathy.  In  the  present  difficult  conditions  of 
reconstruction,  however,  the  inevitable  discontent  has 
been  magnified  by  a  propaganda  carried  on  by  extreme 
elements  opposed  to  the  proper  conduct  of  orderly  govern- 
ment. The  British  Minister  of  Labour,  Sir  Robert  Home, 
explained  that: 

The  industrial  unrest  was  clue,  anions  many  things, 
mainly  to  the  following  causes:  the  long  strain  of  the  war; 
the  nervous  effect  produced  by  the  extreme  industrial  efforts 
of  the  nation;  the  disturbance  of  normal  economic  life;  the 
rise  in  the  cost  of  living;  and,  in  a  certain  measure,  an 
absorption  into  l'",nglish  thinking  oi  the  revolutionary  move- 
mf-nts  fif  i'"urope. 

4 


The  cause  undoubtedly  having  the  most  practical  im- 
port is  the  high  cost  of  living,  due  not  only  to  a  scarcity 
produced  by  the  emergencies  of  war,  but  to  the  high 
rates  of  wages  which  have  in  turn  added  to  the  costs 
of  production.  In  addition,  there  must  be  considered 
the  effects  of  the  depreciation  of  the  monetary  standard 
following  the  giving  up  of  the  gold  standard,  which  inevit- 
ably caused  higher  prices.  In  Great  Britain,  during  past 
decades,  British  industry  gave  little  or  no  attention  to 
the  drab  and  distressing  conditions  of  life  surrounding  the 
workmen.  While  commercial  supremacy  seemed  fairly 
assured,  little  attention  was  paid  to  what  the  employer 
ought  to  have  done  by  way  of  anticipating  the  grievances 
of  labor.  As  a  consequence,  unionism  and  labor  agitation 
have  been  growing  apace.  A  fertile  soil  in  which  such  an 
agitation  could  grow  existed  even  before  1914.  After  the 
upheaval  of  the  war  the  situation  naturally  furnished 
opportunity  for  the  work  of  the  extreme  radicals.  Dis- 
content was  fanned  into  a  movement  urging  a  radical 
modification  of  the  existing  capitalistic  system  and  even 
of  the  structure  of  government.  Certain  socialistic  ele- 
ments propose  to  satisfy  social  unrest  merely  on  a  mate- 
rialistic basis;  that  is,  to  solve  social  ills  primarily  by 
the  offer  of  larger  material  rewards.  Such  a  policy  does 
not  aim  to  supply  the  moral  and  educational  forces  neces- 
sary to  a  higher  standard  of  living. 

Similar  influences  have  wrought  similar  changes  in 
France  and  Italy.  French  industry  has  never  reached  the 
development  that  is  characteristic  of  the  British,  but  in 
those  districts  in  the  northeastern  section  of  the  country 
where  conditions  are  somewhat  comparable,  the  same 
tendency  is  revealed.  Furthermore,  differences  in  tem- 
perament and  in  attitude  of  mind  have  manifested  them- 
selves diflFerently.  This  is  likewise  true  of  Italy.  The 
Latin  peoples  have  reacted  more  quickly  and  more 
violently  to  radical  teachings,  but  they  do  not  show  the 
steadfast  adherence  or  the  steadily  accumulating  force 
behind  them  that  may  be  seen  in  Great  Britain. 

§  6.     The  Moderate  and  Radical  Attitudes 
Contrasted 

Two  different  states  of  mind  must  be  recognized  in 
the  labor  world  of  Great  Britain.  On  the  one  hand  there 
is  the  large  body  of  workers  imbued  with  a  respect  for  law 

5 


and  order,  who,  while  endeavoring  to  improve  their 
material  position,  are  not  greatly  influenced  by  radical 
appeals  to  violence  or  against  existing  forms  of  property, 
and  who  have  a  respect  for  a  lawful  government.  On  the 
other  hand  there  has  risen  a  radical,  even  revolutionary 
point  of  view  which  threatens  not  only  the  peaceful  order 
of  society  but  aims  in  its  extreme  form  at  a  domination  of 
the  industrial  system  and  an  overthrow  of  orderly  govern- 
ment. But  radical  views  have  permeated  all  classes  of 
labor.  All  these  radical  views  aim  at  nationalization  of 
essential  industries,  at  "democratic"  control,  i.e.,  by  the 
workers  themselves,  of  industry,  and  a  "democratic"  use, 
i.e.,  for  the  workers  themselves,  of  the  powers  of  the 
state.  Moreover,  there  is  probably  a  common  agreement 
among  the  majority  of  organized  workmen  in  regard  to 
heavy  inheritance  taxation  and  the  expropriation  of  large 
landed  wealth. 

The  great  difference  of  attitude  arises  in  regard  to 
methods  of  action  and  to  speed  in  attaining  their  ends. 
Some  would  rely  on  industrial  action  alone,  that  is  on  a 
policy  of  force;  some  would  continue  political  and  in- 
dustrial action  separately;  some  would  use  industrial  in 
support  of  political  action.  British  alliances  and  federa- 
tions, however,  as  explained  by  the  union  labor  leaders 
themselves,  claim  their  organizations  will  be  a  means  of 
avoiding  violent  action.  They  aim  at  control  over  their 
members  so  that  unauthorized  strikes  will  be  impossible. 
The  unauthorized  strike,  they  believe,  will  be  unnecessary. 
The  more  radical,  however,  feel  that  the  rising  forces  of 
"democracy"  are  on  their  side  and  that  the  present 
capitalistic  system  is  doomed.  With  some  elements 
employers  obviously  can  expect  to  make  reasonable 
adjustments  if  both  sides  come  together.  With  the 
radical  element  it  must  at  once  be  admitted  that  even 
reasonable  proposals  are  not  likely  to  bring  about  per- 
manent adjustments,  inasmuch  as  their  ultimate  object  is 
the  control  of  industry,  nationalization  and  dominance 
over  the  state.  No  grant  of  intermediate  concessions  will 
stop  their  ultimate  demands. 

The  labor  movement  in  France  is  strongly  dominated 
l)y  radical  leaders,  who  believe  in  revolutionary  syndi- 
calism. While  they  have  taken  over  in  large  part  the 
doctrine  of  the  Socialists,  i.e.,  to  destroy  private  owner- 
ship of  all  means  of  production,  these  leaders  find  the 
Socialists  too  conservative  in   their  attitude  toward  the 


existing  industrial  and  political  systems.  The  present 
distressful  situation  of  France,  financial,  industrial, 
political,  gives  opportunity  for  the  radicals  to  foment 
trouble. 

In  Italy  the  same  forces  are  at  work,  and  it  is  felt  by 
your  Commission  that  Italian  industry  will  inevitably 
drift  into  the  same  position  as  that  of  British  industry  if 
the  workers  of  Italy  become  fully  organized,  so  that  the 
radicals  can  wield  a  stronger  influence. 


§  7.     Collective  Bargaining 

The  Commission  found  that  out  of  the  confusion  of 
voices  discussing  the  critical  industrial  problems  there 
were  certain  catch  phrases  or  slogans  that  ran  from  lip  to 
lip.  These  phrases  were  general  and  vague  in  character 
and  naturally  received  radically  different  interpretations 
by  the  people  using  them.  It  is  our  judgment  that  such 
vague  phrases  may  become  dangerous  through  their  misuse 
and  through  a  lack  of  understanding  of  their  economic 
portent.  So  important  is  this  point  that  particular  atten- 
tion is  here  called  to  certain  of  them. 

"  Whether  the  phrase  '  collective  bargaining '  will 
ever  become  established  in  common  use  in  the  United 
States  is  perhaps  doubtful,"  said  a  report  prepared  for 
the  Industrial  Commission  in  1901.  Today  one  can 
scarcely  open  a  newspaper  without  running  across  the 
expression.  But,  unfortunately,  although  in  common 
use,  the  term  has  an  ambiguous  meaning.  It  thus 
comes  about  thata  labor  dispute  may  hinge  upon  the  defini- 
tion of  this  term.  Certain  workm-^n  may  strike  for  "the 
right  of  collective  bargaining";  the  employers  concerned 
may  assert  that  they  have  offered  collective  bargaining 
and  the  offer  has  been  rejected.  Thereupon,  the  workmen 
announce  to  the  public  that  what  was  offered  and  refused 
was  not  collective  bargaining  at  all. 

It  is  significant  that  workmen  seem  to  count  upon  the 
sympathy  of  the  public  in  making  demands  for  collective 
bargaining.  The  phrase  has  become  one  to  conjure  with: 
"the  right  to  bargain  collectively"  has  largely  supplanted 
the  phrase  "the  right  to  organize,"  as  the  name  for  the 
main  issue  of  attack  and  defense  with  the  non-socialistic 
labor  movement. 


The  ambiguity  of  the  phrase  "collective  bargaining" 
arises  from  the  fact  that  very  largely  it  is  a  holdover  from 
a  bygone  controversy;  the  idea  now  embodied  in  the  words 
has  outgrown  the  literal  meaning  of  those  words.  The 
formula  "collective  bargaining"  was  originally  coined  to 
express  the  antithesis  of  "individual  bargaining,"  and  that 
It  did  aptly  enough.  The  formula  won  its  way  to  general 
use  by  the  public,  because  economists  and  others  main- 
tained that  in  conducting  "individual  bargaining"  under 
modern  conditions  the  workman  was  at  a  disadvantage. 
The  reasons  for  this  alleged  disadvantage  one  may  find 
in  any  textbook  on  economics.  Translated  Into  common 
speech,  the  phrase  "collective  bargaining"  now  means  to 
the  general  public  the  equalization  of  bargaining  condi- 
tions between  capital  and  labor;  the  securing  of  the 
"square  deal"  for  the  employee  under  modern  conditions 
where  the  employer  Is  often  a  huge  corporation.  To  labor 
bidding  for  public  support  in  its  militant  operations  the 
value  of  the  term  "collective  bargaining,"  with  such  a 
popular  construction  put  upon  it,  is  obvious. 

At  the  present  day,  however,  the  expression  "collective 
bargaining"  is  very  largely  a  misnomer  for  the  thing  being 
disputed  by  employers  and  workers.  A  more  accurate 
expression  for  the  real  subject  of  contention  is  "repre- 
sentative bargaining."  Many  employers  in  the  United 
States  and  Great  Britain  today,  outside  the  sweated  in- 
dustries, do  not  insist,  as  a  matter  of  principle,  that  they 
shall  make  arrangements  with  respect  to  employment 
solely  with  each  individual  worker.  They  are  willing 
that  the  workers  shall  present  united  demands,  that  there 
shall  be  debate,  publicity,  and  a  group-wise  determination 
of  the  conditions  of  employment,  —  provided  a  good  deal 
more  does  not  go  along  with  that.  The  general  public  has 
no  conception  of  what  that  "good  deal  more"  Is  or  may 
become.  Very  few  people  other  than  employers  and 
worklngmen  understand  what  has  been  called  "the  im- 
plications of  collective  bargaining."  But  chief  among 
these  "implications"  Is  representation. 

Whenever  a  group  of  workers  bargains  as  a  group  with 
the  employer  or  his  agent  It  has  to  be,  except  under  the 
most  primitive  conditions,  negotiation  conducted  on  the 
side  of  labor  by  representatives  of  the  workers.  In  these 
days  when  a  plant  may  have  thousands  of  workers,  It 
would  suit  neither  the  employer  nor  the  employees  to  have 

8 


intricate  business  dealings  conducted  in  a  sort  of  works 
town-meeting.  The  essence  of  fully  developed  group 
bargaining  is,  therefore,  representation. 

Here  comes  the  rub  and  the  up-to-date  dispute.  Who 
shall  be  the  representative  of  the  collective  body  of 
workers.''  Many  employers  insist  that  he  shall  be  a  person 
in  their  employ,  not  an  outsider.  The  organized  employees 
quite  generally  demand  that  he  shall  be  an  outsider,  or,  as 
they  express  it  in  more  general  terms,  "a  representative 
of  their  own  choosing." 

This  is  not  the  place  to  go  into  the  merits  of  this  ques- 
tion but  certainly  it  is  important  for  every  one  to  keep 
clearly  in  mind  the  full  meaning  of  the  terms  employed. 
To  the  unionist  in  general  "collective  bargaining"  means 
group  bargaining  plus  the  intervention  of  the  out- 
sider. Some  employers  also  accept  this;  but  others  hold 
that  collective  bargaining  means  group  bargaining  con- 
fined to  their  own  workpeople  with  no  intervention  of  an 
outsider.  That  is,  there  may  be  collective  bargaining  in  a 
non-union  shop. 

§8.     "Labor  Not  to  be  Treated  as  Merchandise" 

In  this  country,  as  well  as  abroad,  there  frequently 
appears  in  the  literature  of  labor  unions  the  claim  that 
labor  should  not  be  treated,  or  valued,  as  a  commodity. 
As  good  a  statement  of  this  claim  as  any  may  be  taken 
from  J.  H.  Thomas,  the  head  of  the  National  Union  of 
Railwaymen  in  Great  Britain:^ 

"They  [the  workers]  are  dissatisfied  with  the  system 
of  society  which  treats  their  labour  power  as  a  mere  com- 
modity to  be  bought,  sold,  and  used  as  though  they  were 
machine-like  units  in  the  process  of  wealth  production, 
and  they  therefore  demand  that  they  shall  become  real 
partners  in  industry,  jointly  sharing  in  the  determination  of 
working  conditions  and  of  management." 

In  the  United  States  this  expression  first  came  into 
prominence  in  the  Clayton  Act  of  1914.  There  as  the 
first  sentence  of  Section  6  we  read,  —  "that  the  labor  of  a 
human  being  is  not  a  commodity  or  article  of  commerce." 

The  bearing  of  the  expression  as  here  used  is  wholly 
legal;   it  is  designed  (as  a  part  of  the  whole  enactment)  to 

^At  National  Industrial  Conference,  London,  February  27,  1919. 

9 


amend  the  Sherman  Anti-Trust  Act  so  that  labor  organiza- 
tions or  their  activities  cannot  be  held  by  the  courts  to  be 
illegal  under  that  act.  This  section  then  goes  on  to  say 
immediately  following  the  foregoing  introductory  sen- 
tence: "Nothing  contained  in  the  anti-trust  laws  shall  be 
construed  to  forbid  the  existence  or  operation  of  labor  .  .  . 
organizations,  .  .  .  nor  shall  such  organizations,  or  mem- 
bers thereof,  be  construed  to  be  illegal  combinations  or 
conspiracies  in  restraint  of  trade  under  the  anti-trust 
laws."  The  intent  of  the  words  that  labor  "is  not  a  com- 
modity," as  here  used,  is  clearly  to  exclude  labor,  as 
connected  with  its  organized  activities,  from  the  category 
of  the  things  which  constitute  "trade"  or  "commerce," 
which  last  is  the  subject-matter  of  anti-trust  laws. 
"Trade"  or  "commerce"  consists  in  dealings  in  com- 
modities; hence,  if  the  rule  stands  that  labor  is  not  a 
commodity,  it  would  be  difficult  to  hold  that  a  labor 
union  was  a  monopolistic  combination  in  restraint  of 
trade. 

This  phrase  has  since  been  heard  on  the  lips  of  thousands 
and  it  is  important  to  inquire  just  what  is  meant  by  it. 
We  find  it  stated  by  a  certain  writer  that  "the  conception 
of  labor  as  a  mere  commodity  must  yield  to  that  of  the 
individual  laborer  as  a  human  personality."  And,  again, 
a  certain  labor  organization  demands  that  the  "working 
class"  shall  not  have  a  "commodity  status."  Finally,  the 
doctrine  has  been  recently  embodied  in  the  form  of  a  bill 
of  rights  as  a  portion  of  the  Peace  Treaty  formulated  by 
the  Commissioners  on  International  Labor  Legislation. 
There  we  read:  "The  High  Contracting  Parties  declare 
their  acceptance  of  the  following  principles  .  .  .    : 

"1.    In  right  and  in  fact  the  labor  of  a  human  being  shoiild 
not  be  treated  as  merchandise  or  an  article  of  commerce." 

As  first  drafted,  it  read  that  "labor  should  not  be  regarded 
merely  as  a  commodity  or  article  of  commerce." 

It  is  obvious  that  we  have  here  a  doctrine  that  has 
outgrown  a  local  application  to  the  particular  law  of  a 
certain  country  and  has  become  a  principle  of  labor 
conditions  with  an  international  range  of  application. 
Furthermore,  it  is  to  be  observed  that  there  is  ambiguity 
as  to  what  that  principle  is.  Notwithstanding  the  ap- 
parent simplicity  and  directness  of  the  terms  employed 
("the  labor  of  a  human  being  should  not  be  treated  as 

10 


merchandise")    there    is   a  double  meaning   involved,  — 
the  meaning  of  propaganda  and  the  meaning  of  use. 

The  meaning  of  propaganda  attaches  to  the  laborer 
himself  as  a  human  being.  The  unsophisticated  citizen 
gives  ready  and  uncritical  assent  to  the  doctrine  so 
understood.  "Of  course,"  he  says,  "there  should  be  no 
such  treatment  of  labor  as  would  follow  from  regarding 
labor  as  merchandise.  If  laborers  were  literally  treated 
as  merchandise,  that  would  involve  a  reintroduction  of 
chattel  slavery."  The  average  man  thinks  it  well  to 
promulgate  to  the  world  that  any  and  all  forms  of  helotage 
(modified  slavery)  should  be  a  thing  of  the  past. 

But  with  labor  leaders  and  their  associates  "  the  meaning 
of  use"  in  this  formula  attaches  to  "labor"  in  the  sense  of 
labor  power,  —  not  to  the  laborer  himself,  but  to  the  thing 
he  sells.  It  is  intended  to  establish  the  principle  that  labor 
power  is  not  to  have  its  value  or  worth  established  in  the 
same  fashion  as  obtains  with  ordinary  commodities  or 
articles  of  commerce.  The  price  of  such  things  is  deter- 
mined by  supply  and  demand;  the  price  of  labor  power,  or 
wages,  should  be  otherwise  determined.  This  is  the 
practical  application  of  the  international  doctrine.  Labor, 
in  the  sense  of  labor  power,  is  to  be  exempted,  more  or  less, 
from  the  working  of  the  natural  law  of  supply  and  demand. 

Here  a  distinction  is  to  be  drawn  between  those  who 
would  have  this  exemption  "less"  and  those  who  would 
have  it  "more."  The  conservatives  intend  that  the 
doctrine  that  the  wage  of  labor  is  not  determined  in  the 
same  way  as  the  price  of  other  things  bought  and  sold 
(that  it  is  partially  exempt  from  the  law  of  supply  and 
demand)  shall  carry  with  it  little  more  than  the  implica- 
tions of  collective  bargaining.  They  mean  that  the 
standard  or  customary  wage  shall  be  maintained  —  that 
there  shall  not  be  individual  bargaining  and  unregulated 
competition  with  respect  to  labor.  The  exigencies  of  the 
particular  workman  of  any  class  or  grade  shall  be  ruled 
out;  he  shall  not  take  less  than  the  standard  wage  because 
he  is  hard  up.  The  exigencies  of  the  particular  employer 
shall  be  ruled  out;  he  shall  not  offer  less  than  the  standard 
wage  because  he  is  hard  up.  Finally,  the  exigency  of  a 
general  state  of  trade  shall  be  in  great  measure  ruled  out; 
the  employers  in  general  shall  not  offer  lower  wages  than 
the  standard  because  business  in  general  is  depressed. 

11 


It  is  this  last  contingency,  probably,  that  conservative 
union  spokesmen  especially  have  in  mind.  They  regard 
it  as  highly  important  that  in  dull  times  they  shall  not 
suffer  a  reduction  of  wages.  But  it  is  just  at  such  times 
that  employers  urging  a  reduced  scale  of  wages  insist 
most  on  the  sanction  of  the  law  of  supply  and  demand. 
The  conservative  labor  men  do  not  believe  in  the  utmost 
dependence  on  the  market  for  labor  in  good  times.  They 
believe  in  standardized  and  fairly  stable  wages  or  scales  of 
prices  for  labor  power,  to  be  maintained  in  bad  times  as 
well  as  good  as  the  basis  of  a  standard  of  living.  This 
view  does  not  by  any  means  wholly  reject  the  law  of 
supply  and  demand.  It  is  simply  the  view  that  labor 
power  is  a  unique  commodity  (as  being  attached  to  a 
human  being)  which  should  not,  therefore,  be  governed  as 
regards  its  price  by  cut-throat  competition  or  the  un- 
regulated sway  of  the  law  of  supply  and  demand  such  as 
would  obtain  under  individual  bargaining. 

The  radical  labor  men,  on  the  other  hand,  cut  loose 
from  the  basis  of  the  law  of  supply  and  demand  entirely. 
To  them  the  application  of  the  doctrine  that  labor  is 
not  a  commodity  means  that  wages  of  labor  shall  be 
determined,  not  by  any  fundamental  reference  to  the 
demand  for  and  supply  of  labor,  but  by  the  needs  or 
wants  of  labor.  When  workmen,  or  their  spokesmen, 
demand  that  wages  shall  be  fixed  according  to  the  needs 
of  those  who  furnish  labor  power,  consideration  of  the 
amount  of  and  demand  for  the  product  is  excluded; 
consideration  of  the  amount  of  profits  of  the  employer 
is  excluded.  We  have  no  longer  a  "higgling"  of  the  labor 
market,  no  longer  a  dispute  for  a  division  of  gains  between 
the  employer  and  employees;  we  have  simply  each 
group  of  laborers  as  representing  its  own  interests  trying 
to  collect  from  all  the  rest  of  society.  For  the  funda- 
mental evaluation  of  the  market,  the  general  appraisal 
of  worthwhilcness  by  society,  as  a  determiner  of  wages, 
is  substituted  a  fiat  wage  with  no  other  sanction  than 
"we  need  the  money." 

The  mere  fact  that  a  thing  serves  a  human  need  does 
not  give  it  value.  It  must  always  have  scarcity.  When- 
ever anything  is  unlimited  in  quantity  it  has  no  value 
and  no  price.  The  recognition  of  scarcity  as  a  force 
directly  affecting  labor,  as  well  as  everything  else,  has 
been  the  very  basis  on  which  trade  unions  are  formed; 
they  are  organized  to  raise  wages  by  limiting  the  supply 

12 


of  workers  In  a  given  place  and  Industry.  Opposition 
by  unions  to  strike-breakers  or  non-unionists  Is  a  fear 
of  the  working  of  the  law  of  supply  and  demand.  More- 
over, the  higher  wages  for  skilled,  as  contrasted  with 
unskilled,  workers  is  due  to  the  element  of  scarcity,  or 
monopoly,  enjoyed  by  those  who  possess  skill.  The 
principle  of  scarcity  can  dominate  the  influence  of  utility 
or  the  capacity  to  render  a  satisfaction  or  a  service. 
That  is.  If  skilled  machinists  were  as  numerous  as  ditch- 
diggers  they  could  get  no  more  than  the  latter. 

The  extreme  and  radical  interpretations  emerging 
from  the  doctrine  that  labor  is  not  a  commodity  make 
their  rapid  way  into  the  minds  of  men  to  whose  interest  it 
is  so  to  interpret  it.  If  those  who  establish  that  doctrine 
had  only  in  mind  the  regularization  of  supply  and  demand 
that  goes  along  with  collective  bargaining,  then  it  Is  a 
fresh  Illustration  of  the  danger  of  launching  principles 
that  are  "too  big  for  their  purpose." 

§  9.     Nationalization  of  Industry 

Another  of  the  various  m.odern  catch  phrases  which 
need  elucidation  is  that  of  "nationalization"  of  indus- 
try.    It  presents  itself  today  in  three  distinct  aspects. 

First:  There  is  a  demand  by  various  classes  of  citizens 
actuated  by  various  motives  to  continue  In  whole  or 
In  part  "the  wartime  control  of  industry,"  —  that  is, 
that  greatly  extended  system  of  "governmental  regula- 
tion" of  capitalistic  business  which  came  into  being 
with  the  economic  exigencies  of  the  prosecution  of  the 
war. 

Second:  There  Is  the  proposal  by  citizens  desiring  a 
radical  economic  change,  that  the  National  Government 
as  now  constituted  shall  acquire  ownership  outright 
of  at  least  the  more  important  Industries  and  operate 
them  by  Its  own  agents  in  the  public  interest.  This  is 
a  demand  for  state  socialism  or  collectivism  —  "govern- 
ment ownership  and  operation,"  as  it  has  been  called. 

Third:  There  is  the  demand  by  the  members  of  a 
certain  economic  class  of  society  desiring  radical  economic 
and  governmental  changes,  that  the  National  Govern- 
ment as  presently  to  be  largely  reconstructed  shall  take 
possession  of  at  least  the  more  important  industries  and 
operate    them,   not    by  its    accustomed    agents,   but    by 

13 


associations  of  the  workers  in  those  industries.  This 
proposal  of  "ownership  by  the  state  and  management 
by  the  workers"  may  be  designated  syndicalism,  or 
sovietism,  or  guild  socialism  in  contrast  to  state  socialism 
or  old-style  governmental  collectivism. 

With  the  war  came  a  change  of  degree  of  governmental 
regulation  of  industry.  Not  merely  industries  "affected 
with  a  public  interest,"  according  to  established  pre- 
cedents, but  virtually  all  industries  were  taken  under 
government  "control"  of  the  most  rigorous  sort.  Inter- 
ference extended  far  beyond  "raising  the  plane  of  competi- 
tion," as  was  done,  for  example,  in  the  so-called  factory 
legislation  antedating  the  war.  The  immediate  object 
of  the  new,  all-embracing  "control"  was  not  so  much 
to  correct  the  defects  of  competition  as  temporarily  to 
provide  a  substitute  for  competition.  There  was  a 
runaway  market  in  every  line;  for  the  time  being  the 
natural  laws  of  supply  and  demand  got  utterly  out  of 
hand;  there  were  burdens  on  industry  and  finance  too 
heavy  to  be  carried  in  ordinary  ways;  hence,  the  im- 
provisation of  an  elaborate  governmental  "harness" 
to  distribute  burdens,  to  organize  forces,  to  direct  pro- 
duction and  win  the  war.  There  was  no  philosophical 
bias  or  class  motive  in  all  this.  All  sorts  of  citizens, 
simply  as  citizens,  supported  their  mixed-class  govern- 
ments in  inaugurating  this  temporary  quasi-socialization 
of  industry  for  war  purposes. 

Following  the  war  comes  the  question  whether  this 
war-created  harness  of  control  shall  be  continued  or 
not,  or  rather  for  what  purpose  it  shall  be  continued. 
In  some  quarters  it  is  demanded  that  it  shall  be  continued 
for  a  limited  term  as  a  mere  measure  of  necessity  to 
meet  the  practical  and  immediate  difficulties  of  read- 
justment. There  are  acute  problems  of  distribution  of 
materials,  for  example,  which  occasion  demands  by  ordi- 
nary citizens  that  "shipping  control"  shall  be  retained  in 
the  public  interest.  Again,  the  ordinary  citizen  smarting 
under  the  high  cost  of  living  is  prone  to  cry  out  against 
"profiteers"  and  to  demand  either  price  fixing  or  wage 
awards  or  both. 

In  this  matter  the  motive  is  everything.  For  mixed 
classes  of  citizens  to  advocate  continuation  of  governmental 
control  of  shipping  to  meet  the  exigencies  of  reconstruction 
is  a  very  different  thing  from  a  single  class  demanding 

14 


It  with  the  view  to  permanently  destroying  private 
enterprise.  It  is  one  thing  for  a  member  of  a  labor 
organization  to  demand  a  governmental  award  of  wages 
because  he  wants  more  money  with  which  to  pay  his 
bills  at  present  prices;  it  is  another  thing  for  him  to 
demand  it  in  order  to  establish  the  new  doctrine  that 
labor  is  not  a  commodity;  that  is,  that  wages  are  not  to 
be  determined  by  supply  and  demand. 

Nationalization,  in  the  sense  now  before  us,  means  a 
permanent  policy  of  continuing  the  wartime  practices 
of  control  for  the  purpose  of  displacing  the  pre-existing 
practices.  The  British  Labour  Party  has  declared  its 
belief  that  the  war  resulted  in  the  "collapse  of  a  distinct 
industrial  civilization"  which  should  not  be  restored; 
it  looks  forward  to  "the  progressive  elimination  from 
the  control  of  industry  of  the  private  capitalist."  There- 
fore it  demands  the  retaining  and  the  developing,  after 
the  war,  of  "the  present  system  of  organizing,  controlling, 
and  auditing  the  processes,  the  profits,  and  prices  of 
capitalistic  industry."^  Hold  fast  all  the  ground  that 
has  been  won  from  the  capitalist  during  the  war,  is  the 
idea  of  this  first  phase  of  nationalization. 

The  second  phase  of  nationalization  is  the  familiar 
"Marxian"  or  state  socialism.  This  idea  differs  from 
the  "control"  sort  of  nationalization  just  discussed, 
which  was  shown  to  be  a  hybrid  system  of  private  owner- 
ship with  quasi-governmental  management,  picturesquely 
characterized  in  the  House  of  Commons  recently  as 
"socialism  of  the  most  muddled  variety." 

Traditional  state  socialism,  In  contrast,  is  a  clean-cut 
legal  proposition,  —  the  state  owns  and  the  state  manages 
and  the  state  has  full  undivided  responsibility.  It  is 
to  be  noted  that  state  socialism  is  not  altogether  a  "class- 
conscious"  workingman  movement;  that  is,  the  move- 
ment for  a  conscious  antagonism  between  the  interests 
of  employers  and  workmen.  It  is  to  be  emphasized, 
further,  that  state  socialism  of  the  traditional  sort, 
that  is,  the  proposal  of  government  ownership  and  govern- 
ment management  of  industry,  has  lost  ground  heavily 
during  the  war.  This  has  taken  place  both  with  ordinary 
citizens  and  with  worklngmen  as  a  "class-conscious" 
group. 

1  "Labour  and  the  New  Social  Order."    Pamphlet  of  British  Labour  Party,  p.  12. 

15 


In  England  the  working  people  had  a  most  bitter 
wartime  experience  with  the  Government  as  a  manager 
or  employer  once  removed:  the  memory  of  the  Munition 
Tribunals,  of  broken  promises  and  exasperating  delays, 
is  still  vivid.  The  workingmen  of  Great  Britain,  France, 
and  Italy  are  in  exceedingly  bad  humor  with  "red  tape" 
and  "bureaucracy."  Most  laboring  men  have  decidedly 
cooled  toward  socialism  and  probably  would  prefer  a 
private  employer  to  the  Government  as  an  employer. 

Why,  then,  it  will  be  asked,  if  this  is  so,  do  the  working- 
men  agitate  for  nationalization  of  the  coal  mines  and  of 
the  railroads  in  England?  The  answer  is  that  they  do 
not  propose  to  have  the  Government,  as  we  have  known  it 
in  the  past,  own  these  enterprises  and  act  as  employers. 
They  wish  neither  private  nor  governmental  employers. 
The  threatened  strikes  to  enforce  a  new  departure  with 
respect  to  the  English  mines  and  railroads  are  not  for 
the  purpose  of  bringing  in  socialism  as  that  term  has 
been  understood  in  the  past.  A  wholly  new  scheme  is 
in  process  of  incubation. 

This  introduces  us  to  the  third  and  dominant  phase 
of  nationalization  in  its  present-day  manifestations. 
Old  style  socialism  is  not  wholly  dead,  but  it  is  pretty 
well  sidetracked  as  a  live  issue  by  this  new  movement. 
The  third  phase  of  nationalization  of  industry,  properly 
called  "syndicalism"  in  English,  can  be  considered  in 
two  aspects:  (1)  what  it  purports  to  be,  and  (2)  what 
it  really  is.  It  purports  to  be  government  ownership 
with  a  mixed  management  —  the  general  public  and  the 
workers  both  represented  in  the  management. 

But  the  sharing  of  the  management  with  the  public 
is  only  temporary;  the  ultimate  aim  is  to  have  the  workers 
in  each  nationalized  industry  the  sole  managers  of  that 
industry.  And  the  fiction  of  government  ownership 
will  not  long  survive  this  concentration  of  the  power 
of  management  in  the  hands  of  the  workers.  Whoever 
really  manages  will  really  own.  What  the  scheme  actually 
amounts  to  in  its  economic  aspect  is  to  fully  transfer 
industry  from  the  hands  of  the  present  owners  to  the 
hands  of  the  workers.  The  capitalistic  system  disappears. 
The  Government  at  most  plays  the  role  of  a  sort  of 
sleeping  partner  or  rich  uncle  to  finance  the  deal.  First 
and  last,  the  thing  is  to  be  so  managed  that  the  worker 
will  not  he  uikKt  any  bourgeois  government.  The 
projectors  of  the  scheme  are  determined  about  that. 

16 


The  new  style  nationalized  industry  is  next  going 
to  be  used  to  transform  the  government.  This  is  to 
be  done  partly  by  using  the  economic  power  of  the 
industry  (carefully  chosen  as  a  so-called  basic  industry  — 
mines,  railroads,  shipping)  to  coerce  the  state,  and 
partly  by  means  of  a  new  plan  of  voting  which  funda- 
mentally alters  the  basis  of  the  state.  Under  the  new 
economic  order  citizens  are  to  vote  by  and  in  the  industries 
to  which  they  belong,  not  by  and  in  the  geographical 
areas  where  they  reside.  This  arrangement  will  enable 
the  working  class  to  swamp  all  other  classes,  and  we 
shall  then  have  a  complete  working-class  government. 
That  is  what  "syndicalism"  means  —  a  society  organized 
by  industries  and  the  workers  controlling  in  each  industry. 

§  10.     Democratization  of  Industry 

Another  popular  phrase  is  "industrial  democracy," 
or  the  "democratization  of  industry."  This  phrase 
rests  upon  a  presumed  analogy  between  the  organi- 
zation of  a  political  state  and  the  organization  of 
the  modern  industrial  system.  It  is  often  said  that, 
just  as  men  have  secured  political  democracy,  so  now 
there  must  be  granted  to  them  industrial  democracy. 
Political  democracy  has  meant,  on  the  whole,  equal 
suffrage  in  a  broad  sense,  and  is  coming  to  mean  universal 
equal  suffrage,  within  certain  age,  intellectual  and  moral 
limits.  It  presumes  the  right  of  every  man  to  speak, 
act,  think,  and  vote  as  he  pleases,  always  with  certain 
social  restrictions. 

Something  of  this  sort  is  contemplated  for  industry; 
there  is  to  be  some  kind  of  liberty,  equality,  and  fraternity 
in  the  workshop  and  office.  Just  as  men  are  said,  politi- 
cally, to  be  born  free  and  equal,  so,  industrially,  men 
are  to  become  free  and  equal. 

The  unrest  in  the  industrial  world  today  has  not  its  roots 
solely  in  poverty  and  want.  There  is  something  deeper  still 
at  work.  Wage-earners  are  filled  with  a  vague  but  profound 
sentiment  that  the  industrial  system,  as  it  now  is,  denies 
them  the  liberties,  opportunities,  and  responsibility  of  free 
men.^ 

This  phrase,  like  every  other  of  its  ilk,  absorbs  its 
coloring  from  the  mind  of  the  one  who  interprets  it. 
The  conservative  mind   probably  restricts   the    meaning 

^  Round  Table,  June,  1916. 

17 


to  a  more  cordial,  direct  relation  between  employer 
and  employee,  where  the  employer  has  regard  for  the 
fact  that  his  workmen  are  men  and  have  a  right  to  fair 
dealing,  to  the  necessaries  and  a  fair  share  of  the  comforts 
of  life,  to  a  "fair  wage."  Another  attitude  of  mind  would 
probably  endorse  the  principle  of  collective  bargaining, 
of  a  minimum  wage,  of  carefully  directed  welfare  work, 
of  the  right  for  labor  to  organize  and  to  strike.  But  so 
far  the  industrial  and  political  system  of  today  remains 
Intact. 

The  radical  interpretation  will  go  much  further  than 
this.  It  will  declare  that  democracy  In  industry  means 
an  equal  voice  in  the  management  of  industry.  It  will 
run  out  In  many  directions;  into  the  guildsman's  Idea 
of  a  new  Industrial  framework;  Into  the  socialist's  state 
ownership  and  control  of  the  means  of  production; 
into  the  syndicalist's  Idea  of  total  annihilation  of  the 
state;  Into  a  destruction  of  the  wage  system,  the  rights 
of  private  property,  the  capitalistic  system;  into  the 
war  of  classes  between  bourgeoisie  and  the  proletariat. 

The  subtle  danger  in  such  a  phrase  Is  the  fact  that  it 
runs  through  all  of  these  gradations  of  meaning  without 
change  In  outward  form.  And,  unfortunately,  the  user, 
whoever  he  may  be,  is  likely  to  be  cited  as  endorsing 
the  most  radical  Interpretation.  Furthermore,  It  enables 
the  use  of  such  a  phrase  to  be  "all  things  to  all  men";  a 
conservative  among  conservatives,  a  radical  among 
radicals. 

Your  Commission  feels  that  such  Protean  phrases 
let  loose  upon  the  world,  especially  at  this  time  of  violent 
agitation,  of  widespread  discontent,  both  Industrial  and 
political,  are  particularly  dangerous  and  demand  cool 
and  careful  analysis.  The  facts  given  in  the  following 
chapters  will  demonstrate  this  conclusion  and  will  clearly 
justify  the  emphasis  placed  upon  It  here. 

§  11.     Organization  of  Material 

The  material  secured  by  your  Commission  through 
interviews  and  research  has  been  organized  under 
certain  definite  topics.  It  is  proposed  to  touch  upon 
some  general  phases  of  productive  efficiency  in  Great 
Britain,  France,  and  Italy,  again  with  special  emphasis 
upon    the   situation    in    Great    lirltain.     A    special  treat- 

18 


ment  is  given  of  management  as  a  factor  in  produc- 
tion, stating  compactly  the  economic  principles  involved, 
which  have  not  been  sufficiently  recognized  in  present 
day  discussions  of  the  labor  problems.  The  labor  pro- 
blems themselves,  which  form  the  main  theme  of  dis- 
cussion, and  which  involve  the  great  bulk  of  the  material, 
are  discussed  topically:  to  show,  first,  the  labor  union 
program  abroad;  second,  the  character  and  extent  of 
organization  among  employees  and  employers;  third, 
the  special  significance  of  the  development  of  the  Shop- 
Steward  movement  and  of  Works  Committees;  then, 
to  discuss  the  eight-hour  day,  the  minimum  wage,  un- 
employment; later,  to  point  out  the  political  elements 
permeating  the  labor  problem;  lastly,  to  trace  the  move- 
ment for  nationalization  of  industry  and  the  effect  of 
recent  industrial  and  social  activity  upon  property  rights. 


19 


CHAPTER  II 

EFFICIENCY   OF   PRODUCTION 

§  1.    Dependence  of  the  Producer  on  Efficiency 

Each  manufacturer  is  concerned  directly  with  the 
relation  of  his  outlay  to  his  production.  In  all  com- 
petitive industries  this  margin  of  difference  between 
outlay  and  product  is  vital  to  continuance  in  business. 
Given  a  rising  total  cost,  —  whether  due  to  increasing 
prices  of  materials,  labor,  taxes,  or  what  not,  —  his 
own  possibility  of  continuing  in  production  lies  in  his 
ability  to  enlarge  his  output  (that  is,  to  increase  the  num- 
ber of  units  of  goods  produced  by  a  given  quantum  of 
labor  and  capital)  or  to  raise  the  selling  price  to  the 
consumer  of  each  unit  of  product.  In  the  latter  case 
the  purchaser  (in  other  words,  the  public)  will  have  to 
pay  the  added  cost.  If,  therefore,  producers  in  other 
countries  should  become  as  efficient  as  American  pro- 
ducers, and  if  prices  are  limited  by  conditions  in  inter- 
national markets,  as  they  surely  must  be,  American 
manufacturers  paying  the  higher  labor  rates  would  be 
forced  out  of  the  competitive  field. 

§  2.     Relative  Costs  in  America  and  Great  Britain 

Early  in  our  investigations  the  question  of  efficiency 
of  production  presented  itself.  Everywhere,  especially 
in  Great  Britain,  there  was  expressed  a  fear  of  Ameri- 
can competition,  based  on  the  belief  that  the  war  had 
greatly  increased  the  burdens  on  European  industry 
from  which  our  country  was  largely  free.  But  even 
before  the  war  our  superiority  in  relative  costs  had  become 
apparent  in  certain  lines  of  manufacture.  This  relative 
European  disadvantage  seems  to  be  mainly  due  to  inferior 
manufacturing  methods  and  organization.  Although 
America  owes  much  to  large  scale  production,  good  manu- 
facturing methods,  and  superior  factory  organization, 
such  conditions,  of  course,  do  not  obtain  in  all  industries 
to  the  advantage  of  her  producers.  On  these  matters, 
however,  it  is  of  first  importance  to  American   producers 

20 


that    they    get    all    available    knowledge    regarding    the 
efficiency  of  production  in  other  countries. 

§  3.    Restriction  on  Output 

In  Great  Britain,  having  a  surplus  of  labor,  a  sys- 
tem of  restricting  output  had  grown  up  previous  to 
the  war.  It  was  generally  understood  that  "ca'canny" 
methods  were  in  existence  in  many  British  industries. 
It  was  often  stated  that  the  policy  of  the  employers 
in  reducing  the  piecework  rate  when  wages  rose  to  a 
high  level  was  the  reason  why  some  unions  in  self-defense 
adopted  the  principle  of  restriction  of  output.  In  the 
relative  order  of  their  importance,  the  leading  reasons 
for  restriction  of  output  by  British  trade  unions  are  the 
following:  fear  of  rate-cutting  by  the  employer,  dread 
of  unemployment,  the  desire  to  protect  inferior  workers, 
the  wish  to  safeguard  health,  and  the  natural  human 
disinclination  to  strenuous  labor.  In  regard  to  restriction 
of  output  in  connection  with  the  war,  certain  unexpected 
results  happened.  Under  the  stimulus  of  war  conditions, 
the  introduction  of  improved  machinery  and  the  speeding 
up  of  operations,  it  became  clear  to  every  one  that  labor 
effort  before  the  war  had  not  been  at  its  highest  efficiency. 

There  is,  in  France,  a  very  different  attitude  toward 
this  matter  of  increased  output.  French  employers 
told  the  Commission  that  before  the  war  there  had  been 
some  adherence  to  the  "make-work"  theory,  but  that 
now  this  seemed  to  be  rapidly  passing  away.  The  laborers 
of  France  appear  to  realize  that  a  greatly  increased  pro- 
ductive power  is  necessary  for  the  country  to  recover 
from  the  ravages  of  war  and  to  carry  the  heavy  financial 
burdens  imposed  by  it.  A  very  important  element 
in  this  difference  in  attitude  is  the  realization  that  France 
has  a  distressing  labor  shortage.  Workmen  may  not 
now  be  secured  so  easily  from  Italy  and  Belgium  as 
formerly.  There  is,  consequently,  not  the  fear  of  un- 
employment among  French  workmen,  nor  is  there  the 
network  of  restrictions  in  French  workshops  as  in  British. 
There  has  been  in  France,  however,  a  strong  movement 
for  the  "English  week,"  that  is,  a  week  beginning  Monday 
morning  and  ending  at  noon  on  Saturday,  without 
reduction  in  wages.  French  industry,  also,  is  now  working 
under  a  law  establishing  the  principle  of  an  eight-hour 
day,    but   with    the    promise   by   labor   to   equal    in    this 

21 


shorter  work  time  the  output  of  the  longer  nine  or  ten 
hour  day. 

In  Italy,  where  there  is  a  surplus  of  labor,  as  in  Great 
Britain,  the  workmen  are  not  sufficiently  organized  to 
establish  restrictions  upon  output.  It  must  be  remem- 
bered, too,  that  Italy,  like  France,  is  largely  an  agri- 
cultural country,  and  Italian  industry  has  not  developed 
the  intensity  of  the  British. 

§  4.    The  Network  of  Restrictions 

In  the  period  before  the  war  the  British  labor 
unions  had  established  a  complex  system  of  restrictions 
on  output.  Just  what  is  meant  by  the  "network  of 
restrictions"  is  described  as  follows  by  a  competent 
authority: 

This  network  of  rules  and  agreements,  usages  and  customs, 
was  more  extensive  than  is  usually  realized.  It  covered  differ- 
ent points  in  different  trades,  and  often  in  different  districts 
of  the  same  trade.  Taking  the  network  as  a  whole,  and  at  its 
widest,  it  embraced  not  only  the  standard  rates  of  wages 
and  the  length  of  the  normal  working-day,  together  with 
the  arrangements  for  overtime,  night  work,  Sunday  duty, 
mealtimes,  and  holidays,  but  also  the  exact  classes  of  opera- 
tives (apprenticed  or  skilled,  semi-skilled  or  unskilled,  labor- 
ers or  women)  to  be  engaged  or  not  to  be  engaged  for  various 
kinds  of  work,  upon  particular  processes,  or  with  different 
types  of  machine;  whether  nonunionists  should  be  employed 
at  all;  what  processes  should  be  employed  for  particular  tasks; 
what  machines  should  be  used  for  particular  jobs;  how  the 
machines  should  be  placed  in  relation  to  each  other,  and  the 
speed  at  which  they  should  be  worked;  whether  one  operative 
should  complete  a  whole  job,  or  attend  to  only  one  machine, 
or  form  part  of  a  team  of  specialized  operatives  each  doing 
a  different  process.  What  wages,  if  any,  should  be  paid  in  the 
intervals  between  jobs  or  whilst  waiting  for  material,  and 
what  notice  of  termination  of  engagement  should  be  given; 
whether  boys  or  girls  or  young  persons  should  be  employed  at 
all,  or  in  what  processes  or  with  what  machines,  or  in  what 
proportion  to  the  adult  workmen;  whether  the  remuneration 
should  be  by  time  or  by  the  piece  and  under  what  conditions, 
at  what  rates  and  with  what  allowances;  and  —  perhaps 
where  it  prevailed  most  severely  criticized  of  all,  but  by  no 
means  universally  existing  —  what  amount  of  output  by  each 
operative  should  be  considered  a  fair  day's  work,  not  to  be 
considerably  exceeded  under  penalty  of  the  serious  displeasure 
of  the  workshop.' 

'Webb:     "The    Restoration   of  Trade    Union    Conditions,"    Nisbct   &   Co., 
London,  1917,  pp.  9-12. 

22 


It  has  been  generally  supposed  that  all  of  these  restric- 
tions were  removed  during  the  first  year  of  the  war  at  the 
request  of  the  Government.  In  actual  fact  by  no  means 
all  of  these  restrictions  were  given  up.  Those  which  were 
removed  other  than  those  affecting  hours  and  wages 
concerned  chiefly  the  employment  of  women  and  un- 
skilled persons  in  munition  works. 

It  must  be  remembered  that  by  no  means  the  whole  of  the 
network  has  been  given  up;  .  .  .  the  Federation  .  .  .  was  to 
get  complete  freedom  for  each  employer  to  "dilute"  labor  by 
setting  one  or  two  skilled  mechanics  to  help  and  direct  a  score 
of  less  skilled  workers;  to  break  up  the  jobs  so  as  to  bring  them 
within  the  capacity  of  semi-skilled  workers;  to  introduce 
automatic  machinery  and  engage  non-unionists  and  un- 
apprenticed  men,  laborers,  and  women;  to  work,  if  need  be, 
an  unlimited  number  of  hours  seven  days  a  week,  without 
regard  for  Factory  Acts  or  holidays;  to  substitute  for  the 
standard  time  rates  whatever  piecework  or  bonus  systems  they 
found  convenient;  and,  above  all,  so  to  speed  up  the  machin- 
ery and  abrogate  all  customary  limitations  on  individual 
output  as  to  get  the  very  maximum  of  production.  ^ 

The  evidence  oflFered  by  manufacturers  does  not  indicate 
that  trade  union  restrictions,  except  as  affecting  women 
and  unskilled  labor,  were  removed  during  the  war  or  are 
at  present  inoperative.  Many  specific  instances  point  to 
this  conclusion.  In  this  connection  we  may  quote  the 
statement  of  the  President  of  the  British  Iron  and  Steel 
Institute  published  during  the  last  year  of  the  war:  ^ 

When  it  was  found  that  the  demands  of  the  Government 
for  a  greatly  accelerated  production  of  shells  required  the 
employment  of  girls  in  the  projectile  factory,  owing  to  the 
scarcity  of  skilled  workers,  these  girls  in  all  cases  produced 
more  than  double  that  by  thoroughly  trained  mechanics  — 
members  of  trade  unions  —  working  the  same  machines 
under  the  same  conditions. 

In  the  turning  of  the  shell  body  the  actual  output  by  girls 
with  the  same  machines,  and  working  under  exactly  the  same 
conditions  and  for  an  equal  number  of  hours,  was  quite 
double  that  by  trained  mechanics.  In  the  boring  of  shells  the 
output  was  also  quite  double,  and  in  the  curving,  waving,  and 
finishing  of  shell  cases  quite  120  per  cent  more  than  that  of 
experienced  mechanics. 

^Webb:  "The  Restoration  of  Trade  Union  Conditions,"  Nisbet  &  Co., 
London,  1917,  pp.  16,  17. 

^National  Industrial  Conference  Board,  Research  Report  No.  8,  "Wartime 
Employment  of  Women  in  the  Metal  Trades,"  July,  1918,  p.  36. 

23 


In  an  establishment  where  skillful  handling  of  the  men 
tended  to  secure  maximum  production,  two  instances  of 
restriction  were  nevertheless  quoted.  In  a  certain  depart- 
ment the  earnings  per  week  uniformly  averaged  25  per 
cent  above  the  timework  basis.  This  25  per  cent  was  the 
standard  calculation  for  the  difference  between  piecework 
and  timework.  An  official  of  the  company  was  suspicious 
of  this  uniformity.  After  explaining  to  the  men  that  he 
must  get  at  the  real  cost  of  the  operation,  he  boldly 
announced  that  he  would  cut  the  piece  price  25  per  cent. 
Upon  their  objecting,  he  offered  the  men  "anything  you 
like  to  make  for  a  year."  Within  a  fortnight  some  men 
were  earning  60  per  cent  above  their  former  money. 

This  official  said  that  trade  unions  in  many  cases  did 
restrict  output,  but  he  cited  no  actual  examples.  He  said 
the  workers  associated  increased  production  with  in- 
creased strain  and  in  many  cases  felt  it  was  better  to 
earn  a  reasonable  wage  with  less  wear  and  tear  than  to  go 
on  piecework  with  high  earnings. 

One  of  the  large  establishments  formerly  worked  over- 
time systematically,  paying  time  and  a  quarter  for  such 
overtime.  The  Works  Manager  carefully  studied  the 
situation  and  came  to  the  conclusion  that  the  same  amount 
of  work  could  be  accomplished  without  any  overtime. 
With  the  consent  of  the  management,  he  put  an  end  to 
overtime  work  and  within  two  weeks  they  found  that  the 
men  were  doing  as  much  in  nine  hours  as  they  formerly 
did  in  eleven,  and  actually  turned  out  more  work,  so  that 
the  men  made  more  money  and  the  company  got  more 
product  without  any  overtime. 

In  the  works  of  a  large  company  doing  machining  of 
shafts  for  electric  generators,  the  work  was  done  on  the 
piecework  system  —  the  men  being  guaranteed  their  time 
rate  —  and  the  setting  of  the  piecework  price  was  based  on  a 
very  low  average  output  per  hour  per  man.  The  jobs  them- 
selves were  of  a  type  lasting  from  three  days  to  one  week. 
Both  unionists  and  non-unionists  were  employed  in  the 
shop.  The  unionists  were  only  permitted  by  their  trade  union 
to  earn  one  and  one-quarter  time  and,  when  they  were  found 
to  be  earning  one  and  one-half  time  they  were  privately 
warned  by  the  shop  stewards  to  slow  down.  The  non-union- 
ists were  invariably  in  the  habit  of  earning  one  and  one-half 
time  and  more.  Unionists  in  many  cases  were  found  to  be 
earning  only  three-quarter  time.  However,  a  fairly  rigid  disci- 
pline  was   maintained;     and,   when   they  were   found   to  be 

24 


behind  unit  time  they  were  warned,  and  finally  discharged. 
The  description  of  the  works  managers  (probably  a  personal 
and  prejudiced  one)  of  the  union  employees  was  that  they 
were  the  "scum"  and  they  looked  upon  the  non-union  work- 
men as  the  pick  of  the  men.  He  never  knew  of  any  case  of  a 
unionist,  after  being  warned  against  maintaining  too  high 
an  output,  rebelling  against  the  orders  of  the  shop  steward. 
He  stated  that  if  the  workman  had  disobeyed  he  would  have 
been  brought  up  before  his  union  and  fined  anything  from  five 
shillings  to  a  pound. 

The  works  manager  of  another  company  stated  that  the 
trade  unions  generally  demanded  that  their  members  should 
not  earn  more  than  one  and  one-third  time.  This  he  attri- 
buted to  the  fear  that  piece-rates  would  be  cut  if  earnings 
were  too  high,  and  to  the  desire  to  "create"  employment  for 
fellow  workers.  This  restriction  of  output  was  not,  so  far 
as  he  knew,  formulated  in  black  and  white,  but  any  man  who 
disobeyed  the  shop  steward's  orders  in  this  regard  would 
undoubtedly  be  "branched"  at  his  trade  union  meeting;  con- 
trary to  opinion  in  the  company  previously  referred  to,  he  did 
not  think  an  actual  fine  would  be  imposed.  His  conviction  was 
that  previous  to  the  war  the  men  were  producing  not  more 
than  one-half  and  possibly  only  one-third  their  possible  out- 
put. He  also  stated  that  he  found  much  more  restriction  in 
connection  with  big  and  heavy  manufacture  than  in  the 
making  of  small  stuff,  and  evidently  felt  that  the  fear  of  un- 
employment had  much  to  do  with  it.  As  his  firm  had  2,000 
male  and  1,000  female  employees  it  is  possible  that  the 
employment  of  women  was  a  factor  in  the  absence  of  restric- 
tion on  light  work. 

The  experience  of  a  Scotch  establishment  is  another 
illustration  of  restriction  of  output.  Four  new  brass  finishing 
lathes  were  about  to  be  installed  in  the  main  part  of  the  factory 
when  one  of  the  workmen  quietly  told  the  foreman  that  if  they 
would  install  those  machines  on  the  top  floor  away  from  the 
rest  of  the  shop  and  allow  him  to  pick  out  a  few  men  to  operate 
them,  he  would  double  the  customary  output.  The  foreman 
accepted  the  suggestion,  the  machines  were  installed  by  them- 
selves, the  workman  selected  three  other  men,  and  the  produc- 
tion on  those  machines  immediately  went  up  to  almost  three 
times  that  in  the  main  body  of  the  shop.  This  showed  what 
restriction  had  actually  been  carried  on  in  the  plant  and  what 
the  workmen  could  produce  if  they  gave  their  best  efforts. 
In  this  case  the  piece-rate  was  retained  and  these  men  earned 
very  large  wages.  The  superintendent  of  this  establishment 
stated  that  union  officials  do  not  urge  the  workers  to  try  to 
increase  the  output  in  shorter  work  hours,  in  spite  of  their 
promises  to  increase  production,  and  it  is  obvious  that  they 
themselves  do  not  expect  this  result. 

25 


The  officials  in  one  of  the  best  equipped  collieries  in  South 
Wales,  while  they  would  not  say  so  directly,  apparently 
believed  in  spite  of  what  union  leaders  say  about  increased 
production,  that  the  men  are  silently  but  firmly  working 
against  all  labor-saving  devices.  Where  coal  conveyers, 
machines  for  cutting,  and  so  on,  have  been  introduced, 
something  is  always  happening  to  them. 

On  the  other  hand,  at  a  meeting  with  several  manufacturers 
one  man  claimed  that  the  English  workman  did  not  have  the 
mentality  or  physical  ability  to  handle  some  of  the  American 
machine  tools.  For  instance,  IngersoU-Rand  drills,  which 
operate  very  successfully  in  America  in  quarry  work,  were  a 
failure  when  handled  by  an  English  workman  in  England. 
This  hindrance  to  efficiency,  if  it  exists,  may  be  partially 
compensated  for  by  more  careful  workmanship.  In  the  manu- 
facture of  munitions,  it  was  pointed  out,  in  practically  all  cases 
of  feed  and  speed,  speed  of  operation  is  very  much  below 
United  States  and  Canadian  practice.  Nevertheless,  British 
shops  manage  to  turn  out  every  week  an  output  in  quality  and 
quantity  which  seems  to  average  equal  to  our  good  shops. 
Repairs  and  rejections  to  scrap  are  less  than  in  the  United 
States.  The  ample  floor  space  required  by  the  factory  laws  — 
approximately  50  per  cent  more  than  usual  in  the  United 
States  —  also  helps  to  account  for  the  satisfactory  quality 
of  the  output,  as  it  contributes  to  efficient  management. 

The  undeniable  increase  of  production  during  the  war, 
it  is  clear,  cannot  be  due  solely  to  the  withdrawal  of  the 
union  restrictions.  In  addition,  there  was  an  introduction 
of  new  and  effective  elements  of  management,  such  as 
large  scale  production,  standardization  of  operations, 
and  the  bringing  in  of  new  machinery  by  which  repetitive 
processes  could  be  carried  on  by  hitherto  unskilled  persons. 
Consequently,  a  sweeping  transformation  occurred  in  the 
organization  of  British  industry.  New  processes  and 
new  classes  of  labor  were  introduced. 

[British  industry  has  learned]  the  lesson  of  the  economic 
advantage  of  a  large  output,  of  production  for  a  continuous 
demand,  of  standardization  and  long  runs,  of  the  use  of 
automatic  machinery  for  separate  production  of  each  compo- 
nent part,  of  team-work  and  specialization  among  the  opera- 
tives, of  universalizing  piecework  speed,  and  of  not  grudging 
to  the  workers  the  larger  earnings  brought  by  piecework 
effort.  We  do  not  think  it  is  any  exaggeration  to  say  that  the 
15,000  or  20,000  establishments,  large  or  small,  in  every  con- 
ceivable industry,  with  which  the  Ministry  of  Munitions,  the 
Board  of  Trade,  the  War  Trade  Department,  and  the  Ad- 
miralty   have   been    in    touch,    are   now   turning  out,   on   an 

26 


average,  more  than  twice  the  product  per  operative  employed 
than  they  did  before  the  war,  whilst,  assuming  the  same 
standard  rates  of  wages,  grade  by  grade,  the  labor  cost  works 
out  considerably  lower  than  under  the  old  system.^ 

The  modification,  however,  in  the  whole  character  of 
industry  by  these  changes  had  not  been  anticipated. 

Under  the  continued  incitement  and  pressure  of  the 
Ministry  of  Munitions,  the  employers  in  all  the  industries 
supplying  the  thousand  and  one  different  things  that  the 
Government  required  gradually  transformed  their  factories 
and  workshops,  not  only  as  regards  buildings  and  machinery, 
but  also  as  regards  the  hours  of  labor,  mealtimes,  overtime, 
and  holidays;  the  methods  and  rates  of  remuneration;  the  con- 
ditions of  engagement,  suspension,  and  dismissal;  the  disciplin- 
ary code,  with  its  fines  and  other  penalties;  the  relation  of 
the  operatives  to  the  machines  and  of  the  various  grades  and 
classes  of  operatives  to  each  other;  and,  above  all,  as  regards 
the  grades,  classes,  ages,  trades,  and  sex  of  the  operatives 
employed.^ 

...  It  is  suggested  that  no  such  sweeping  transformation 
in  the  organization  of  British  industry  —  a  transformation 
occurring  not  in  any  one  trade  only,  but  simultaneously  in 
nearly  all  branches  of  manufacture  —  has  taken  place  since 
what  is  known  as  the  Industiial  Revolution  of  1780-1825.^ 

.  .  .  They  have  not  been  restricted  to  the  "Controlled 
Establishments,"  now  nearing  5,000  in  number;  nor  to  those 
other  thousands  to  whom  some  of  the  provisions  of  the  Muni- 
tions Acts  limiting  the  freedom  of  labor  have  been  applied 
by  official  order;  nor  yet  to  the  innumerable  other  firms 
employed  on  "war  work."  Nor  has  their  operation  been  con- 
fined to  the  orders  of  the  British  Government  or  its  Allies. 
There  is  scarcely  a  branch  of  manufacturing  industry  that  has 
not  been  affected,  from  steel-smelting  to  the  making  of 
scientific  instruments,  from  saw-milling  and  shipbuilding  to 
every  corner  of  the  furnishing  trade;  from  processes  in  all  the 
metals,  and  chemicals  to  work  in  leather,  glass,  pottery, 
India  rubber,  textiles,  paper,  and  food  preparations,  not  even 
wholly  excluding  the  transport,  distributive,  and  municipal 
services.^ 

§  5.     Restoration  of  Restrictions 

Now    that    the    war   is   ended    and   the   obligation    of 
restoring  the  restrictions  under  Government  promise  is 

^Webb:  "The  Restoration  of  Trade  Union  Conditions,"  p.  38. 
Ubid.,    p.  27. 
Ubid.,   p.  28. 

27 


faced,  It  is  discovered  that  the  organic  changes  have  been 
such  that  it  will  be  impossible  to  go  back  to  pre-war 
conditions.  In  the  case  of  the  Amalgamated  Society  of 
Engineers  alone 

.  .  .  the  restoration  of  "the  practice  ruling  in  our  work- 
shops, shipyards,  and  other  industries"  would  involve,  .  .  . 
(1)  the  exclusion  of  all  the  women,  unapprenticed  men,  men 
from  other  crafts,  laborers,  and  in  many  factories  also  the  non- 
unionists,  from  all  strictly  engineering  work;  (2)  the  total 
abolition  of  "dilution"  and  teamwork  in  all  its  forms;  (3) 
either  the  scrapping  of  the  many  millions  of  pounds'  worth 
of  new  automatic  machines,  or  their  manning,  even  when  they 
were  used  for  simple  operations,  exclusively  by  skilled 
engineers  at  the  old  standard  rates;  (4)  the  abandonment  of 
any  form  of  "scientific  management"  wheiever  it  has  been 
introduced;  (5)  in  nearly  all  establishments  the  abolition 
of  piecework  or  bonus  systems  of  remuneration,  where  they 
have  been  newly  adopted,  and  a  resumption  of  the  old  weekly 
standard  rates;  and,  in  short,  (6)  a  return  to  the  arrangement 
under  which  a  skilled  mechanic,  attending  to  a  single  machine, 
occupied  exclusively  with  a  single  job,  did  it  from  start  to 
finish  at  a  fixed  weekly  wage.^ 

Hence,  in  spite  of  the  governmental  promises  to  restore 
the  limitations  on  output,  it  is  realized  that  restoration 
cannot  be  carried  out: 

To  put  it  plainly,  we  could  not  restore  that  part  which 
has  been  abrogated  of  the  network  of  agreements  and  rules, 
usages  and  customs,  that  existed  before  the  war,  even  if  this 
could  anyhow  be  done,  without  undoing  the  new  industrial 
revolution;  and  without  making,  in  a  reverse  direction,  as 
sweeping  a  change  throughout  British  manufacturing  in- 
dustry as  has  been  effected  by  that  revolution.  We  may  as 
well  admit  to  ourselves,  straight  away,  that,  in  face  of  so  great 
a  national  loss,  and  of  the  opposition  both  of  the  employers 
and  of  the  new  classes  of  operatives  who  would  have  to  be 
turned  out,  together  with  that  of  their  sympathizers  in  other 
social  circles,  no  Government  could  insist  on  carrying  out  the 
pledge;  and  that,  in  spite  of  its  plighted  troth,  no  Government 
will   try.'^ 

There  is  some  evidence  that  the  more  intelligent  labor 
leaders  have  come  to  realize  the  undesirability  of  restric- 
tion. In  a  large  establishment  near  Manchester,  the 
chairman   of   the   works   committee   recognized   that  the 

•Webb:  "Tlic  Restoration  of  Trade  Union  Conditions,"  pp.  47-48. 
■^Ihid.,  pp.  40,50. 

28 


workers  must  produce  efficiently;  but  It  was  evident  that 
he  retained  the  confidence  of  the  men  only  by  great  tact 
and  skill. 

A  leader  in  trade  unions  explained,  In  connection  with  the 
restriction  of  output  by  the  use  of  machinery,  that  the  intro- 
duction of  such  improved  machinery  in  peace  time  could  only 
have  been  effected  after  considerable  trouble  and  opposition. 
He  was  firmly  of  the  opinion  that  the  workers  should  reverse 
their  policy  of  restriction  to  one  of  productivity,  as  this 
would  lead  to  higher  wages  and  moie  satisfactory  conditions 
for  the  workers.  He  stated,  however,  that  he  had  worked  very 
hard  trying  to  impress  this  policy  upon  the  Unionists,  but 
that  he  was  of  the  opinion  that  the  rank  and  file  of  the 
Unionists  were  still  very  firmly  convinced  that  restriction  of 
output  meant  work  for  larger  numbers;  and  he  felt  discouraged 
because  of  his  inability  to  shake  this  conviction.  He  also 
seemed  convinced  that  if  the  policy  of  restriction  on  output 
was  restored  and  enlarged,  the  result  would  be  the  crippling  of 
British  industry. 

In  general,  skilled  workers  wished  to  return  to  the  old 
practice  of  restriction  of  output;  but  the  new  workers, 
who  were  unskilled,  did  not. 

It  may  be  seen,  therefore,  that,  owing  to  the  impossi- 
bility of  restoring  the  old  restrictions  on  output,  the  labor 
leaders  will  regard  that  fact  as  a  reason  why  they  should 
be  given  equivalent  advantages  In  some  other  directions. 
If  they  yield  in  these  demands,  It  will  be  to  improve  their 
bargaining  position  In  other  matters.  Already  the  British 
Labour  Party  has  shown  Its  understanding  of  this  bargain- 
ing power  by  including  among  the  "demands"  In  Its  plat- 
form for  the  December,  1918,  elections  the  following: 

3.  The  complete  fulfilment  of  the  nation's  pledge  to  the 
trade  unionists  that  they  should  be  unconditionally  reinstated 
in  respect  of  the  trade  union  conditions  and  workshop  customs 
abrogated  in  the  public  interest;  or  else  that  the  Govern- 
ment should  submit  for  their  acceptance  measures  calculated 
to  achieve  the  same  ends. 

§  6.  Bonus  and  Premium  Systems 

Schemes  for  the  stimulation  of  productivity  have  been 
tried  abroad  to  secure  high  speed  war  production. 
The  most  widespread  has  taken  the  form  of  a  bonus  or 
premium.  The  offer  of  a  bonus  or  a  premium  for  more  or 
better   work    has    not    been    very    popular   with    British 

29 


workmen.  An  elaborate  system,  however,  was  established 
on  the  basis  of  a  "day  rate."  By  the  day  rate  in  this  case 
is  meant  the  current  rate  before  adding  the  Government 
bonuses  of  23  shillings  and  6  pence,  and  123/2  P^r  cent 
added  to  the  regular  rate  and  to  the  bonus.  For  instance, 
the  regular  rate  of  wages  for  a  fitter  at  the  present  time  is 
30  shillings  per  week  of  47  hours;  added  thereto  is  a  bonus 
of  23  shillings  and  6  pence,  and  123^  per  cent  on  the 
total,  making  the  final  rate,  including  bonuses,  70  shillings 
and  3  pence.  All  wage  rates  were  made  up  of  these  three 
parts,  the  original  basic  wage  established  between  em- 
ployer and  workman,  the  Government's  addition  of  a  flat 
sum,  23  shillings  and  6  pence  per  week,  and  a  third  part, 
123/^  per  cent  of  wages  plus  bonus  to  meet  the  increase  in 
cost  of  living. 

In  France,  likewise,  there  was  a  war  bonus  system 
whereby  a  graduated  sum  was  added  to  the  wage  on 
account  of  the  high  cost  of  living  {Primes  cherte  de  vie). 
It  was  so  arranged  that  a  workman  drawing  but  7.70 
francs  per  day,  the  minimum,  would  receive  3  francs  addi- 
tional, and  a  woman  worker  drawing  6  francs  per  day,  the 
minimum,  would  receive  2  francs  additional.  As  the 
wage  increased  in  both  cases  the  additional  amount 
decreased,  so  that  a  workman  drawing  17  francs  per  day 
would  get  nothing  additional,  and  a  woman  worker 
drawing  14  francs  would  get  nothing  additional.  The 
basic  rates  were  set  by  Rate  Fixing  Committees  in  each 
political  district. 

The  committee  consisted  of  five  workers  (two  women) 
and  five  employers,  nominated  by  the  respective  local  syndi- 
cats  and  appointed  by  the  Minister  of  Munitions.  The  rates 
set  by  these  committees  are  minimum  rates;  good  workmen 
get  more  and  sometimes  much  more.  The  same  rates  applied 
to  these  same  classes  of  labor  throughout  the  district. 

Prior  to  the  war  the  condition,  at  least  in  the  boot  and 
shoe  industry,  was  different.  Your  Commission  was  in- 
formed by  leading  manufacturers  that 

Previous  to  the  war,  labor  union  leaders  (in  the  boot  and 
shoe  industry)  argued  for  a  smaller  production,  in  order  to 
leave  work  for  more  workmen.  Dayworkers  would  not  hustle. 
The  cutters  in  the  shoe  industry  were  mentioned  by  way  of 
illustration.  These  men  are  necessarily  on  a  time  basis  to 
insure  good  cutting  and  efficient  use  of  skins.  Old  and  young, 
feeble  and  strong  workmen  all  cut  the  same  number  of  pieces 
per  day.    A  incniium  system  was  of  no  avail. 

30 


In  Italy,  also,  your  Commission  found  a  war  bonus 
system  in  operation.  It  was  stated  to  us  that  piece  and 
premium  work  is  common  in  Italian  shops.  Wages  were 
increased  by  25  per  cent  for  overtime,  a  principle  that 
would  hold  under  the  new  eight-hour  day.  The  general 
war  bonus  system  established  was  to  pay  a  certain  amount 
of  wages  per  day  and  then  add  to  it  25  per  cent  or  30  per 
cent  to  cover  the  increase  in  living  costs.  Besides  this 
bonus,  a  premium  is  sometimes  offered  for  increased 
output. 

The  practically  inevitable  outcome  of  the  wartime 
bonus  system  has  been  that  the  workmen  insist  that  these 
bonuses  shall  be  made  permanent.  In  the  same  way  the 
seamen's  unions  are  demanding  that  the  war  bonus  to 
sailors  in  the  submarine  zone  shall  be  incorporated  into  the 
peace  time  permanent  wage.  This  same  movement  is 
found  in  Great  Britain,  France,  and  Italy.  The  wages 
that  rose  in  the  war  emergency  are  not  to  descend  in  time 
of  peace,  if  the  workmen  can  prevent  it. 

§  7.     Piecework 

Piecework  has  been  used  much  more  effectively.  It 
has  often  given  the  workers  higher  wages,  while  manage- 
ment gets  a  benefit  by  a  spreading  of  the  overhead  charges. 
The  employers  agreed  that  during  the  war  piece-rates  set 
on  a  scale  of  effort  and  production  prevailing  before  the 
war  should  not  be  reduced;  this  removed  the  objection  of 
the  workers  and  resulted  in  many  cases  in  very  high 
productivity  with  consequent  high  wages.  For  instance, 
women  and  unskilled  workers  on  repetitive  war  work  came 
to  earn  more  than  the  previous  earnings  of  skilled  men 
working  at  day  rates.  In  the  main  the  objection  to  piece- 
work has  been  that,  when  earnings  rise  the  manager  lowers 
the  rate  and  the  interest  of  the  worker  in  enlarging 
productivity  is  removed.  In  the  Amalgamated  Society  of 
Engineers  a  particular  job  was  paid  for  on  a  certain 
allowance  of  unit  time;  and  until  recently  employers 
offered  a  bonus  on  time  saved.  But  it  was  claimed  by  the 
workers  that  the  reduced  time  was  made  the  basis  for  a 
reduction  of  the  time  allowance  on  a  new  contract. 
Furthermore,  the  theoretical  objection  is  generally  held 
that  the  worker  cannot  be  expected  to  increase  production 
under  the  present  system  of  distributing  shares  by  which 
it  is  claimed  that  an  increased  product  goes  to  the  em- 
ployer.   Consequently,  it  is  urged  that  if  the  workers  had 

31 


a  larger  share  in  the  management  of  industry  so  that  an 
increased  product  would  increase  wages,  there  would  be 
no  opposition  to  exerting  effort  to  enlarge  productivity. 

There  is  evidence  that  restriction  of  output  has  been 
avoided  where  there  was  no  cutting  of  rates: 

In  a  large  establishment  employing  17,000  men,  the  piece- 
rates  during  the  war  were  set  on  a  basis  which  permitted  a 
first-class  mechanic  to  earn  double  the  day  rate.  The  piece- 
rates  were  set  by  the  company  on  a  basis  permitting  the 
mechanic  to  earn  twice  the  regular  rate  of  30  shillings,  or  a 
total  of  78  shillings  per  week.  Some  operators  on  piecework 
made  200  per  cent  and  even  300  per  cent  more  than  the  regular 

day  rate.    Mr. had  not  seen  much  evidence  of  attempt 

by  the  men  in  one  shop  to  hold  down  production  in  another 
shop  when  the  piece-rate  was  the  same  in  both  cases.  The 
men  in  two  shops  might,  however,  check  up  between  the 
shops  and  make  sure  that  both  were  getting  the  highest  rate  for 
the  same  piece.  The  piece-rates  were  set  from  a  time  study 
made  from  the  drawings  and  not  by  pace-setters  or  stop- 
watch investigations.  When  the  work  was  placed  in  the  shop, 
the  piece-rates  were  announced,  but  each  operator  was  given 
time  to  try  out  the  work  before  accepting  the  rate,  and,  if  he 
did  not  think  the  rate  satisfactory,  it  was  subject  to  negotia- 
tion between  the  foreman  and  himself.  The  rate,  when  once 
agreed  upon  by  both  sides,  remained  in  effect  throughout  the 
contract,  unless  a  change  was  made  in  the  operation.  With 
this  policy,  there  was  no  difficulty  in  getting  the  men  to 
produce  at  rates  which  were,  in  the  opinion  of  the  company, 
about  at  the  limit  of  their  capacity- 

In  commercial  business  the  company  would  not  be  able  to 
grant  such  liberal  piece-rates.  For  instance,  at  one  time  the 
company  was  bidding  on  certain  work  in  competition.  The 
Shop  Stewards  were  called  in  and  the  necessity  of  setting 
rates  on  a  basis  of  50  per  cent  above  the  day  rate  instead  of 
100  per  cent  was  made  clear  to  them,  and  this  basis  was 
accepted  by  the  men  after  the  situation  had  been  explained  to 
them.  However,  the  workmen  do  not  always  accept  the  piece- 
rates  easily,  and  sometimes  a  matter  runs  along  for  a  month 
before  the  company  and  men  get  together. 

The  main  reasons  why  the  workpeople  slacken  in  their 
work  and  demand  shorter  working-hours  are,  in  the  first 
place,  the  fear  that  there  will  not  be  enough  work  to  go 
around  if  they  produce  to  the  limit  of  their  capacity;  and, 
secondly,  they  believe  that  under  present  conditions  they 
will  not  get  any  benefit  out  of  the  higher  productivity. 
When  such  apprehensions  are  removed,  there  is  a  tendency 
toward  agreement  and  co-operation. 

32 


One  leader  of  the  Iron  and  Steel  Trades  Confederation  ex- 
plained that  in  his  organization  the  straight  piecework  system 
prevailed.  By  mutual  agreement  piecework  rates  were 
worked  out  on  the  conditions  prevailing  in  the  industry  at  any 
particular  moment.  With  the  increased  prosperity  two  pos- 
sible lines  of  policy  were  followed.  First,  the  improvement 
by  increase  in  the  size  of  the  furnaces  without  decreasing  the 
amount  of  manual  labor  required.  The  Confederation  always 
argued  that  the  amount  of  manual  labor  per  ton  remaining 
the  same,  there  should  be  no  change  in  the  tonnage  rate. 
The  employer  gained  enough  from  the  decreased  overhead 
expenses  to  recompense  him  for  the  outlay  on  enlarged  fur- 
naces.    Mr. went  back  to  the  history  of  the  trade  some 

years,  and  showed  that  the  tonnage  rate  of  2  shillings  and 
6  pence  per  ton  for  handwork  on  furnaces  had  been  con- 
sistently maintained,  but  when  new  machinery  for  feeding  the 
furnaces  was  introduced,  the  men  again  by  agreement  arrived 
at  an  allowance  for  the  machinery,  and  based  it  on  the  work 
of  the  third  man  of  the  gang  employed  on  a  furnace,  so  that 
the  tonnage  rate  was  reduced  one  third.  This  is  a  second 
method.  The  principle  prevailing  in  the  wages  relations 
between  the  smelters  and  the  employers  was  that  there  must 
be  no  change  in  rate  unless  there  was  a  corresponding  change 
in  conditions  and  methods  of  production.  He  stated  that  the 
tradition  of  the  steel  smelters,  one  of  the  constituent  unions 
of  the  association,  was  opposed  to  restriction  of  output. 

In  a  large  establishment  near  Glasgow  where  piece- 
rates  are  never  reduced  or  cut  except  where  a  change  in 
design  is  made  or  where  the  method  of  doing  the  work  is 
materially  improved,  no  difficulty  was  experienced  with 
the  pieceworkers.  On  daywork,  however,  where  the  rates 
are  also  guaranteed,  slacking  was  very  pronounced,  and 
the  only  way  the  workmen  could  be  induced  to  produce 
was  on  a  premium  or  piece-rate  basis  by  which  they  made 
large  earnings. 

The  worker's  point  of  view  regarding  piece-rates  as 
expressed  in  a  discussion  with  a  representative  of  the 
Commission  was  substantially  as  follows: 

The  rate-fixing  department  was,  in  the  majority  of  works, 
known  as  the  "guessing"  department.  In  British  engi- 
neering works  no  scientific  system  of  rate-fixing  prevailed. 
Rates  were  fixed  stupidly  and  unjustly.  Any  skilled  and 
honest  representative  of  the  workers  could  replace  the  present 
type  of  rate-fixer,  and  thus  give  both  employer  and  employee 
a  fairer  deal. 

On  the  foreman  and  the  rate-fixer  rested  the  onus  of 
responsibility  for  much  of  the  alleged  inefficiency  in  British 

33 


industry.  A  foreman  was  too  often  a  bully,  hard  and  in- 
considerate. The  rate-fixer,  more  often  than  not,  set  a  rate 
that  was  too  high.  If  men  worked  at  normal  speed  on  rates 
set  so  high,  they  would  earn  a  wage  that  would  be  much  above 
the  average,  viz.,  25  per  cent  above  the  time  rate  in  the  trade. 
The  rate-fixer  was  in  the  habit  of  meeting  this  situation,  the 
result  of  his  own  blunder,  by  cutting  the  rate.  The  secretary 
of  the  local  National  Guild  League,  a  brainy  and  silent  man, 
gave  first-hand  evidence  of  a  conversation  between  a  head 
rate-fixer  and  his  subordinate  in  which  a  rate  that  yielded 
more  than  33  per  cent  above  time  rates  was  discussed,  and  the 
conclusion  reached  to  "cut"  it,  on  the  ground  that  the  work- 
man was  earning  too  much  above  the  normal  rate. 

The  workmen  met  this  situation  by  restricting  production. 
They  "soldiered";  they  accepted  the  time-fixer's  rate  and 
never  showed  what  they  were  capable  of  doing.  Practically 
every  man  present  confessed  that  prior  to  the  war  this  was 
their  attitude.  They  feared  the  cutting  of  the  pi  ice  and  un- 
employment. The  Chairman  of  the  Shop  Stewards  said  that 
he  was  given  twelve  hours  by  the  rate-fixer  for  an  operation 
which  he  found  he  could  do  in  one  and  a  half  hours.  He  took 
the  twelve  hours,  though,  for  his  rate  would  have  been  "cut," 
and  he  could  see  no  other  line  of  action.  The  present  foreman 
said  that  he  was  for  four  and  a  half  months  on  a  job  where  he 
systematically  restiicted  production,  in  the  sense  that  he 
accepted  the  time  set  and  never  exerted  himself  to  lower  it. 
He  would  have  received  no  advantage  for  doing  so. 

All  present  asserted  that  there  has  been  no  restriction 
during  the  war.  In  the  establishment  where  they  worked,  and 
where  the  Shop  Stewards  had  a  large  voice  in  affairs,  the  time- 
rate  was  the  fairly  low  one  of  2  shillings  and  6  pence  an 
hour,  but  there  were  many  men  whose  rates  were  equal  to  6 
shillings  an  hour.  This  was  a  new  firm  which  had  learned 
that  it  could  afford  high  wages  as  long  as  it  got  high  pro- 
ductivity. If  employers  could  learn  that  lesson,  and  could  see 
that  democratically  elected  Shop  Stewards  could  be  as  efficient 
as  the  present  foremen  and  rate-fixers,  the  "control  of  in- 
dustry" demanded  by  the  leaders  in  the  Shop  Steward 
movement  would  be  beneficial  to  everybody.  The  control 
they  demanded  did  not  go  any  further  than  above  defined. 
Problems  of  buying  and  selling,  and  of  finance,  were  beyond 
the  dreams  of  the  capacities  of  the  workers. 

§  8.     Profit-Sharing  and  Education 

In  tlie  past,  profit-sharing  has  been  regarded  as  a  way 
out  of  these  difficulties.  After  assigning  a  reasonable 
return  to  the  various  grades  of  labor  and  a  fixed  interest  to 
capital,  a  division  of  the  remaining  profits  to  labor  and 

34 


capital  is  Involved  In  such  a  system.  In  some  cases  there 
have  been  good  results;  but  wherever  there  has  been 
confidence  In  the  good  faith  of  the  management,  it  has  been 
found  that  such  confidence  generally  permitted  other 
methods  than  profit-sharing  to  become  quite  as  effective 
in  bringing  about  good  relations  between  workmen  and 
employers.  It  is  to  be  kept  in  mind,  however,  that, 
with  extreme  labor  leaders,  profit-sharing  has  no  favor, 
because  it  recognizes  the  maintenance  of  the  capitalistic 
system  which  ought  to  be  destroyed  and  succeeded  by 
Socialism.  If  the  whole  or  even  a  partial  control  of  in- 
dustry is  obtained  by  the  workers,  there  is  no  reason  for 
talking  about  a  share  in  profits. 

So  far  as  the  labor  force  is  concerned,  every  one  knows 
that  efficiency  of  production  is  really  dependent  on  an 
intelligent,  trained,  and  willing  body  of  workers.  This 
involves  a  thoroughly  good  method  of  general  education 
in  the  earlier  years  for  all  children.  In  this  respect  Great 
Britain  has  been  lamentably  wanting.  A  system  of 
technical  training  for  skilled  artisans  has  been  maintained 
only  by  Germany,  of  all  European  countries.  This  Is  a 
significant  fact  to  be  faced  by  the  Allies  in  looking  to  the 
future  of  industry.  Skilled  workers,  other  things  being 
equal,  make  low  costs,  large  productivity,  and  allow  high 
wages.  But  back  and  beneath  all  these  considerations 
there  must  be  found  a  moral  code  which  will  ensure  a  high 
quality  of  goods,  freedom  from  imperfections,  pride  in 
work,  as  well  as  govern  the  health,  conduct,  and  family 
relations  of  the  workers. 

The  British  and  French  Governments  are  awake  to  this 
situation.  The  British  Board  of  Education  under  the 
direction  of  Mr.  Fisher  is  developing  an  extensive  program 
for  general  and  technical  education.  Labor  unions  also 
favor  an  extension  of  educational  facilities,  a  raising  of  the 
age  limit  for  compulsory  attendance  at  school,  and  better 
technical  training.  The  same  problem  Is  being  faced  in 
France.  Among  many  other  effects  of  the  war,  it  seems 
possible  that  more  extensive  and  effective  education  may 
be  one. 

§  9.     Attitude  toward  Scientific  Management 

The  American  method  for  increasing  production  by 
a  scientific  study  of  the  productive  process,  called  by 
various  names,  such  as  scientific  management  or  efficiency 

35 


engineering,  has  been  consciously  adopted  by  but  few 
firms  in  Great  Britain,  France,  and  Italy. ^  Indirectly, 
however,  the  influence  of  the  movement  has  been  marked 
in  awakening  interest  and  in  suggesting  minor  changes  in 
methods.  The  attitude  of  organized  labor  to  this  move- 
ment is  worth  noting. 

The  attitude  of  the  British  workm.en  towards  scientific 
management  is  decidedly  hostile;  they  object  to  being 
"Taylorized."  The  workers  feel  that,  although  the  war 
introduced  quantity  production  Into  British  industry  by 
necessity,  quantity  production  in  peace  times  may  not  be 
suited  to  their  own  ends.  They  do  not  want  to  appear  to 
be  opposing  efficiency  in  the  task  of  national  restoration, 
yet  they  hold  that  the  principles  of  scientific  management 
are  anti-democratic  and  tend  to  destroy  that  monopolistic 
control  of  the  trade  unions  over  production  which  they 
consider  the  safeguard  of  their  standard  of  living  and 
economic  power.  Moreover,  such  Institutions  as  scientific 
management  work  against  their  National  Guilds  plan 
for  the  ownership  and  control  of  capital  In  conjunction 
with  a  democratic  state.  Accordingly,  their  trade  unions 
expect  to  reject  a  greater  partof  such  "American  methods" 
until  they  are  prepared  to  regulate  the  employers'  applica- 
tion thereof. 

The  following  extract  indicates  the  consensus  of  labor's 
opinion  on  scientific  management  before  its  principles 
were  extensively  Introduced  into  British  industry: 

Though  there  are  but  few  firrns  in  England  that  have  intro- 
duced scientific  managerrient,  the  system  has  spread  very 
largely  in  America  and  an  acute  controversy  has  arisen  as  to 
the  effect  of  the  system  as  a  whole  on  the  workers  and  their 
unions.  .  .  .  All  these  controversies  bring  us  back  to  the  fact 
that  scientific  management  is  as  yet  the  servant  of  capitalism 
and  that  there  are  but  few  chances  of  judging  it  on  its  own 
merits.  Where,  however,  it  is  unconnected  with  the  "human 
factor"  of  the  wage-earner,  scientific  management  has  de- 
veloped mechanical  devices  and  acquired  a  "hand  wisdom" 
that  should  be  of  value  in  eliminating  waste  and  increasing 
the  wealth  of  the  whole  community,  whoever  has  industrial 
control.' 

Later,  (j.  II.  I).  Cole  expressed  In  his  article  "Scientific 
Management,"    the    attitude    of    labor    following    their 

'Labour  Yearbook,  IDKi,  p.  251. 

36 


further  experience  with  applications  of  the  Taylor  system, 
which  in  part  is  as  follows: 

The  whole  tendency  of  scientific  management,  as  developed 
by  the  employers  and  by  the  industrial  experts  today  is  anti- 
democratic. It  tends  to  the  concentration  of  knowledge, 
authority,  and  industrial  power  in  the  hands  of  the  few,  and 
takes  away  from  the  worker  not  a  little  even  of  that  small 
share  of  responsibility  and  self-determination  which  he  has 
enjoyed  in  the  past.  Among  the  trade  unionists,  on  the 
other  hand,  the  demand  is  continually  growing  that  the  rank 
and  file  workers  in  the  workshops  should  have  a  greater  say 
in  the  organization  of  their  industry  and  in  the  control  of 
their  working  lives.  Thus  there  is  a  clear  opposition  between 
the  two  tendencies.  .  .  .  This  means  in  practice  the  rejection 
of  most  of  those  aspects  of  the  system  which  the  employers 
are  most  anxious  to  establish.^ 

The  sympathetic  attitude  of  the  French  workmen 
towards  scientific  management,  as  shown  in  their  labor 
newspapers,  is  in  decided  contrast  with  the  antagonistic 
attitude  of  the  British  workmen.  The  shortage  of  labor, 
together  with  the  stringency  of  money  and  the  necessity 
for  increased  production  are  chiefly  responsible  for  the 
keen  interest  of  the  French  wage-earners  in  "Taylorism" 
(the  only  scheme  the  French  seem  to  know  of)  and  their 
demand  for  its  rational  application  to  the  solution  of  their 
national  reconstruction  problem.  As  with  the  British, 
the  chief  problem  confronting  French  labor  is  that  of 
control  of  the  application  of  the  system.  To  this  end 
labor  leaders  are  urging  the  adoption  of  a  council  of  joint 
control  which  will  include  a  workman  delegate,  an  expert 
physician,  and  a  representative  of  the  employers.  This 
scheme  is  a  step  towards  co-operative  management.  In- 
cidentally it  will  eliminate  the  "esprit  patronal"  or 
paternal  attitude  of  employers  which  in  the  past  was 
found  disagreeable  to  the  workmen. 

The  following  short  excerpts  from  discussions  on 
scientific  management,  published  in  U Information,  indi- 
cate the  general  attitude  of  the  workers: 

The  Taylor  system  is  .  .  .  the  only  means  of  solving  the 
economic  crisis  resulting  from  the  war.^ 

The  application  of  the  Taylor  system,  in  whatever  concerns 
the  ruling  of  labor,  should  be  controlled  by  a  workingman 
delegate  and  an  expert  physician.^ 

iThe  Labour  Yearbook,  1919,  p.  259. 
2  Dr.  Pillet,  December  8,  1918. 
^Ibid,  December  22,  1918. 

37 


Workmen  by  their  syndical  organizations  and  notably  by 
the  General  Confederation  of  Labor  will  enforce  the  general 
acceptance  of  the  knowledge  of  the  scientific  principles  of  the 
organization  of  labor.  They  will  fight  the  prejudices,  yet  too 
common  among  workmen  against  perfection  of  technique,  in 
demonstrating  that  the  true  spirit  of  modern  methods  con- 
sists in  diminishing  labor  and  useless  effort,  in  increasing  the 
esprit  de  corps,  and  to  cause  all  classes  of  producers  to  share 
the  profits  of  the  increase  in  industrial  productivity/ 

§  10.     The  Coal  Industry 

An  illustration  of  reduced  efficiency  of  production 
is  found  in  the  coal  industry,  which  is,  of  course,  one  of 
primary  importance  not  only  to  Great  Britain  but  to  all 
her  competitors.  The  ability  of  the  British  to  produce 
coal  cheaply  and  to  employ  it  in  the  working  up  of  raw 
material  has  been  essential  to  the  maintenance  of  her 
foreign  trade.  Since  coal  is  an  indispensable  necessity  for 
all  classes  of  the  community,  the  coal-mining  industry 
could  exercise  a  powerful  influence  in  bringing  industry 
to  a  standstill.  The  expense  of  production  of  coal  has 
risen  to  such  a  point  that  America  can  successfully 
compete  with  her  in  selling  coal  in  many  foreign  markets. 
Cheap  British  coal  seems  to  have  gone  forever.  One 
reason  evidently  is  the  decreasing  efficiency  of  the  miners, 
together  with  a  demand  for  higher  wages  and  shorter 
hours  of  work.  Fully  95  per  cent  of  the  miners  have 
organized  in  unions.  They  have  been  aggressive  and  un- 
willing to  compromise.  In  March,  1915,  they  refused  to 
sign  the  Treasury  Agreement  and  were  unwilling  to  sur- 
render the  right  to  strike.  When  the  Government  was 
compelled  to  place  them  under  the  provisions  of  the 
Munitions  Act  in  July,  1915,  they  did  not  acquiesce.  In 
December,  1916,  under  authority  of  the  Defense  of  the 
Realm  Act,  the  Government  took  control  of  the  mines, 
at  the  same  time  conceding  a  substantial  increase  in 
wages. 

In  February,  1919,  they  demanded  an  increase  in  wages 
of  30  per  cent  and  a  reduction  in  working  hours  of  25  per 
cent,  together  with  the  acceptance  of  the  principle  of  the 
ultimate  nationalization  of  the  industry.  The  Govern- 
ment appointed  a  Coal  Commission  whose  report  was 
named  from  its  chairman  the  Sankey  Report.  The 
Government  adopted  and  the  miners  ultimately  accepted 

'  Andre  Cilrocn,  January  Hi,  191!). 

38 


this  report,  which  recommended  not  only  an  increase  of 
2  shilHngs  per  day  worked  and  a  reduction,  beginning 
July  16,  1919,  of  the  hours  of  labor  from  8  to  7,  but, 
"subject  to  the  economic  position  of  the  industry  at  the 
end  of  1920,"  the  hours  of  labor  per  day  were  to  be  reduced 
to  6  hours  at  and  from  July  13,  1921.  In  June,  1919, 
after  considering  the  question  of  nationalization,  the  Coal 
Commission,  in  the  main  report,  signed  by  Justice  Sankey, 
recommended  immediate  legislation  for  the  acquisition  of 
the  mines  by  the  state.  It  then  became  a  question  whether 
Lloyd-George's  coalition  government  and  the  people 
would  accept  the  policy  of  nationalization  thus  proposed.^ 

Along  with  this  industrial  disturbance  in  the  coal  in- 
dustry has  gone  a  serious  reduction  in  the  output  of  the 
mines  and  a  rise  in  the  price  of  coal  both  for  export  and 
for  domestic  consumption.  Before  the  war  the  average 
annual  output  for  the  coal  mines  was  about  270  million 
tons.  In  June,  1919,  Sir  Auckland  Geddes  informed  the 
House  of  Commons  that  the  annual  production  from  July, 
1919,  could  not  be  more  than  about  217  million  tons; 
and  he  warned  the  public  of  the  coming  scarcity  and  high 
prices  of  coal.  Already  coal  had  increased  in  price.  Sir 
Richard  Redmayne,  Chief  Inspector  of  Mines,  showed  that 
the  wage  cost  per  ton  at  the  pit  mouth  had  risen  from 
6  shillings  and  4  pence  in  1913  to  15  shillings  and  4^/^  pence 
in  1918.  The  cost  of  coal  at  the  pit  mouth  had  increased 
from  about  10  shillings  in  1914  to  24  shillings  and  10  pence 
in  September,  1918.  The  average  selling  price  in  Lon- 
don in  1914  was  25  shillings  and  6  pence  a  ton,  while 
the  controlled  public  price  in  1918  was  43  shillings  and 
6  pence,  and  in  July,  1919,  it  was  proposed  to  increase  it 
by  6  shillings. 

As  a  consequence,  American  coal  exporters  have  made 
inroads  into  markets  formerly  supplied  by  Great  Britain. 
To  Brazil,  Argentina,  and  Uruguay  shipments  from  the 
United  States  have  increased  from  96,000  tons  in  1910  to 
1,619,000  tons  in  1916;  while  British  exports  to  these 
countries  had  fallen  off  from  6,304,000  tons  in  1913  to 
1,105,000  tons  in  1916.  Of  course  much  of  this  change 
should  be  attributed  to  the  difficulties  in  obtaining  ship- 

^  Recent  events  injuly,  1919,  show  a  very  serious  situation.  In  Parliament 
a  strong  opposition  to  nationalization  has  arisen.  Thereupon  the  coal  miners 
have  gone  on  a  strike  to  enforce,  among  other  things,  the  recommendations  of 
the  Sankey  Report.  Sir  Auckland  Geddes  explained  that  the  rise  in  the  price 
of  coal  was  dangerous  to  British  industry;  but  the  strike  went  on.  Later  in 
August  Lloyd-George  refused  to  accept  the  principle  of  nationalization. 

39 


ping  and  to  the  obvious  effect  of  the  war  on  the  distribu- 
tion of  coal.  It  remains  true,  however,  that  the  United 
States  has  been  increasing  the  quantity  of  its  coal  exports 
to  Italy,  Sweden,  Spain,  and  other  countries.  The  ex- 
planation of  this  change  in  exports  is  partially  due  to  the 
fact  that,  in  the  period  up  to  1912,  the  output  in  tons  per 
employee  had  fallen  in  Great  Britain  from  312  to  244  tons, 
but  that  it  had  risen  in  the  United  States  from  400  to  660 
tons. 

The  relative  efhciency  of  production  is  directly  affected 
by  the  use  of  mechanical  coal  cutters.  Between  1903  and 
1917  the  number  of  machines  used  in  the  United  Kingdom 
increased  from  643,  producing  over  5,000,000  tons  of  coal, 
to  3,799  machines,  producing  over  27,000,000  tons  of  coal; 
while  In  the  United  States  in  the  same  years  the  number 
of  machines  increased  from  6,658,  producing  over 
69,000,000  tons  of  coal,  to  16,197  machines,  producing  over 
253,000,000  tons  of  coal.  In  fact,  in  1912  and  1913  only 
8  per  cent  of  English  coal  was  obtained  by  the  use  of  coal- 
cutting  machinery  as  contrasted  with  probably  51  per 
cent  in  the  United  States.  It  also  Is  clear  that  the  English 
collieries  and  docks  —  certainly  in  Wales  —  are  not 
equipped  with  such  modern  labor-saving  machinery  as  In 
the  United  States.  The  absence  of  modern  devices  for 
saving  of  labor  in  boiler  houses  and  on  the  surface  generally 
is  very  noteworthy.  No  doubt  before  the  war  labor  was 
cheap  and  it  was  more  profitable  to  employ  labor  than  to 
Introduce  machinery.  In  some  parts  of  England,  however, 
especially  in  the  Durham  Field  and  on  the  docks  at  New- 
castle and  South  Shields,  better  trucks  and  electric  haulage 
with  modern  tips  and  cranes  have  been  introduced.  The 
attitude  of  organized  labor  to  this  introduction  of  ma- 
chinery Is  not  clear.  In  the  investigation  of  your  Com- 
mission, it  seemed  plain  that,  while  open  opposition  might 
not  have  existed,  something  was  always  happening  to  the 
machinery  to  prevent  Its  efficient  use.  In  fact  some 
definite  antagonism  to  machinery  was  clearly  Indicated. 


§11.     Efficiency  in   Shipyards 

I'Voni  an  inspcclimi  of  the  sjiipyards  on  the  Clyde 
Sfjme  observations  were  made  bearing  upon  efficiency  of 
production  In  this  line  of  industry.  A  few  modern,  well- 
equipped   yards,    with    a   good   layout,   were   noted.       In 

40 


general,  however,  they  are  cramped  for  space  and  suffer 
from  the  fact  that  the  original  plans  had  not  anticipated 
large  expansion.  The  result  is  a  cramped  yard,  with 
poorly  organized  processing  of  material.  The  machine 
shops  had  good  machines,  many  of  them  up  to  date  and 
probably  brought  in  to  replace  older  types  through  stress 
of  war.  There  appeared  to  be  in  many  instances  a  some- 
what lavish  use  of  labor  for  running  the  machines.  This 
may  be  due  to  tradition  in  the  industry,  from  which  in 
general  Europe  suffers  far  more  than  America.  Pneu- 
matic riveters  are  supplanting  handwork  with  steady, 
if  not  rapid,  progress.  One  foreman  expressed  the  typical 
attitude  toward  this  process  of  substitution  by  saying: 

We  know  that  pneumatic  riveters  are  coming,  are  bound 
to  come.  They  are  faster,  and  speed  in  shipbuilding  is  now 
demanded.  The  work  of  riveting,  however,  is  not  done  so 
well.     We  know  that. 

It  is  estimated  that  about  one  half  of  the  riveting  is 
now  done  by  pneumatic  tools.  The  workers  with  these 
machines  make  higher  wages  than  hand  riveters.  This 
is  one  device  used  by  the  management  to  secure  their 
adoption. 

One  phase  of  the  situation  which  a  foreigner  cannot 
appreciate  is  the  influence  of  long  association  with  the 
industry  on  the  part  of  workmen,  and  the  universal  pride 
in  achievement,  in  prestige,  among  the  men.  There  is  a 
sense  of  being  born  and  bred  to  the  shipbuilding  trade  that 
finds  expression  in  all  sorts  of  ways.  Labor  becomes  less 
mobile  because  the  workmen  have  no  idea  of  seeking  work 
elsewhere.  There  is  a  pride  in  the  excellence  of  work  done, 
in  the  fine  traditions  of  the  firm  that  counts  for  much. 
Such  forces  work  for  a  strong  undertow  of  conservatism 
among  the  laborers. 

British  shipbuilding  costs  are  rising,  due  to  higher  costs 
of  materials  and  higher  wages  demanded  by  workmen. 
There  does  not  appear  any  immediate  likelihood  of  steel 
or  steel  frames  falling  in  price.  Labor  demands  are  con- 
tinuing persistently.  It  was  the  consensus  of  managerial 
opinion  that  the  efficiency  of  workmen  decreased  with 
increases  in  wages  and  increased  with  falling  wages.  As 
in  the  case  of  coal,  British  shipbuilders  are  looking  with 
serious  concern  toward  the  United  States. 

41 


§  12.     Efficiency  in  War  Work 

Mention  should  be  made  in  this  connection  of  the 
British  war  industries,  that  is,  the  munition  factories. 
Because  many  of  these  had  to  be  built  from  the  ground  up, 
and  because  others  were  so  radically  changed  by  the  war, 
they  illustrate  what  British  efficiency  can  do  under  stress 
of  circumstances  and  when  released  from  peace-time 
restrictions  and  inertia.  A  few  items  from  the  observa- 
tions made  by  an  American  expert  are  noted  below: 

In  practically  all  cases  feed  and  speed  and  the  speed  of 
operators  are  very  much  below  United  States  and  Canadian 
practice.  In  spite  of  this  British  shops  manage  to  turn  out 
every  week  an  output  which  in  quality  and  quantity  seems  to 
average  equal  to  our  good  shops.  Repairs  and  rejections  to 
scrap  are  less  than  in  the  United  States. 

British  tooling  and  general  shop  organization  is  much  less 
highly  specialized  than  in  the  United  States. 

Shops  are  very  weak  in  conveyers,  use  of  air  spot  welding, 
high  speed  steel,  and  many  other  things  which  we  find  efficient. 

Nearly  all  British  shops  have  approximately  50  per  cent 
more  floor  space  than  those  in  the  United  States,  by  any 
standard.  This  is  paitly  due  to  British  factory  law,  but  is 
of  great  advantage  to  efficient  management.  Comparatively 
few  shells  are  around  a  machine  at  any  time,  and  these  are 
kept  moving.  Any  defective  shells  are  immediately  repaired 
or  scrapped.  Few  are  even  visible  in  any  shop.  The  better 
handling  of  these  points,  together  with  the  uniformly  high 
quality  of  forgings,  is  believed  to  account  for  the  fairly  satis- 
factory quantity  of  output,  notwithstanding  that  the  feeds 
and  speeds  and  the  speed  of  workers  are  low. 

Almost  all  British  shops  are  extremely  light  and  pleasant 
places  to  work  in.  Sanitary  arrangements  are  excellent  for 
men  and  women.  Majority  of  the  shops  are  equal  to  the  best 
in  the  United  States  in  this  respect. 

All  parts  of  shops  are  kept  scrupulously  clean  in  most  cases. 

The  war  demand  for  high  speed  production  has  un- 
doubtedly had  a  material  effect  upon  industrial  methods  in 
Great  Britain,  France,  and  Italy.  A  continued  reiteration 
of  the  superior  productive  methods  of  Germany  and  the 
more  effective  use  of  machinery  by  the  United  States  has 
resulted  in  awakening  an  eager  interest  in  the  minds  of 
prc)duction  managers.  They  want  to  know  what  these 
methods  are;  they  are  more  open-minded  to  new  processes, 
new  labor-saving  devices,  better  organization.     It  seems 

42 


generally  agreed  that  scrapping  of  old  machines  will  not  be 
such  a  heart-rending  process  in  the  future  as  it  has  been  in 
the  past.  The  British  mind  is  pretty  thoroughly  shaken 
in  this  aspect  of  its  insularity.  French  industrial  and 
commercial  leaders  are  likewise  keenly  aware  of  the 
coming  competitive  struggle.  With  the  restoration  of 
material  resources,  they  are  growing  ambitious  to  become 
an  efficient  industrial  nation. 

§  13.     Conclusion 

A  part  of  the  struggle  in  these  countries  to  secure  a 
higher  degree  of  productive  efficiency  is  certain  to  be  the 
overcoming  of  labor's  antagonistic  attitude.  Restriction 
of  output  Is  not  consistent  with  an  attempt  greatly  to 
increase  output.  It  is  a  fundamental  attitude  that  must 
be  changed.  Thoroughgoing,  cordial  co-operation  be- 
tween employers  and  workmen  is  essential  to  efficient 
production.  One  may  wisely  draw  the  conclusion,  there- 
fore, that  our  own  industrial  advancement  should  not  be 
menaced  with  the  inevitable  dangers  arising  from  the 
wrong  point  of  view  spread  among  our  workmen  —  the 
erroneous  principle  that  more  employment  in  a  country 
where  there  is  a  surplus  of  labor  can  be  obtained  by  lower- 
ing the  production  of  each  worker.  The  forces  which, 
undirected  or  wrongly  directed,  have  already  brought 
British  industries  to  a  crisis,  should  not  by  our  careless 
passiveness  be  permitted  to  produce  the  same  effects  upon 
our  own. 


43 


CHAPTER  III 
MANAGEMENT 

§  1.     Confused  Talk  on  Economic  Problems 

There  was  found  in  all  the  countries  visited  by  your 
Commission  a  common  element  in  the  new  labor  move- 
ment. This  common  element  is  a  direct  challenge  to 
the  present  industrial  system.  Workmen  may  talk  of 
this  or  of  that  subject,  but  behind  it  all  and  admitted  over 
and  over  again  is  the  fairly  well  defined  aim  to  establish  a 
new  social  and  industrial  order.  This  aim  may  appear  in 
a  variety  of  phrases.  It  may  be  spoken  of  as  the  democra- 
tization of  industry,  or  as  self-government  within  the 
shop,  or  as  democratic  control,  but  the  real  essence  of  the 
meaning  is  the  same.  There  is,  undoubtedly,  however, 
much  loose  and  thoughtless  talk  on  this  subject  by  those 
who  are  opportunists.  They  have  not  given  serious  or 
long-continued  thought  to  the  economic  significance  of 
the  views  which  they  present.  In  view  of  this  fact,  there- 
fore, something  needs  to  be  said  at  this  point  about  one 
function  in  our  industrial  regime,  which  has  been  greatly 
obscured  by  lack  of  clear  thinking,  before  the  general 
problems  of  labor  are  taken  up.  This  is  the  function  of 
management. 

In  the  published  utterances  of  labor  leaders  there  is 
usually  no  clear  distinction  made  between  industrial  con- 
trol and  the  function  of  management.  As  an  example  of 
Labor's  attitude  toward  this  subject,  the  following  quota- 
tion from  the  program  of  the  British  Labour  Party  will 
serve : 

It  demands  the  progressive  elimination  from  the  control 
of  industry  of  the  private  capitalist,  individual  or  joint-stock; 
and  the  setting  free  of  all  who  work,  whether  by  hand  or 
brain,  for  the  service  of  the  community,  and  of  the  com- 
munity only.^ 

Or  again: 

The  only  solution  of  the  industrial  problem  is  the  transfer- 
ence of  the  control  of  industry  from  "private  enterprise"  to 

'"Labour  and  the  New  Social  Order."  Pamphlet  of  the  British  Labour 
Party,  p.  12. 

44 


the  organized  workers  by  hand  and  brain,  under  a  system 
which  will  ensure  that  the  workers  will  produce  for  use  in- 
stead of  profit,  as  the  servants  of  the  whole  community  and 
not  of  a  privileged  class. ^ 

Equally  pertinent  is  the  following: 

Even  now  the  industrial  weapon,  whether  it  be  the  strike 
or  negotiation  backed  by  the  threat  to  strike,  can  be  used  to 
secure  a  foothold  in  control  and  to  pave  the  way  for  the 
assumption  of  management  by  the  workers.  Already  there 
are  signs  that  this  is  happening.* 

The  scope  of  demands  by  labor  runs  from  a  share  in  the 
control  of  working  conditions  in  the  shop  to  the  taking 
over  of  the  entire  function  of  the  employer.  The  quota- 
tions given  above  are  types  of  the  radical  attitude.  The 
following  may  be  taken  as  an  example  of  a  more  moderate 
point  of  view: 

Would  it  not  be  possible  for  the  employers  of  this  country 
...  to  agree  to  put  their  businesses  on  a  new  footing  by 
admitting  the  workmen  to  some  participation  —  not  in 
profits,  but  in  control.?  We  workmen  do  not  ask  that  we 
should  be  admitted  to  any  share  in  what  is  essentially  the 
employers'  own  business  —  that  is,  in  those  matters  which  do 
not  concern  us  directly  in  the  industry  or  employment  in 
which  we  may  be  engaged.  We  do  not  seek  to  sit  on  the 
Board  of  Directors,  or  to  interfere  with  the  buying  of  materials 
or  with  the  selling  of  the  product.  But  in  the  daily  manage- 
ment of  the  employment  in  which  we  spend  our  working  lives, 
in  the  atmosphere  and  under  the  conditions  in  which  we  have 
to  work,  in  the  hours  of  beginning  and  ending  work,  in  the 
conditions  of  remuneration  and  even  in  the  manners  and 
practices  of  the  foremen  with  whom  we  have  to  be  in  contact, 
in  all  these  matters  we  feel  that  we,  as  workmen,  have  a  right 
to  a  voice  —  even  to  an  equal  voice  —  with  the  management 
itself.  Believe  me,  we  shall  never  get  any  lasting  industrial 
peace  except  on  the  lines  of  democracy.* 

With  more  discernment  of  the  complexity  of  the  pro- 
blem, an  "intellectual"  leader  of  the  labor  movement  in 
Great  Britain  has  expressed  as  his  opinion  that  extended 
control  by  organized  workmen  has  proven  a  failure: 

Attempts  of  trade  unions  to  engage  in  industry  have  been 
uniformly   and    invariably   financially   unsuccessful,    and    no 

^  "The  Industrial  Chaos."     National  Guilds  Leaflet,  No.  8,  p.  4. 
^  "National  Guilds."    Pamphlet  of  the  National  Guilds  League,  No.  1,  p.  14. 
^  Mr.  Gosling:  Presidential  Address  to  the  Trade  Union  Congress,  1916. 

45 


encouragement  should  be  given  to  any  trade  union  to  find  any 
capital  for  industrial  enterprises,  whether  under  its  own  con- 
trol or  by  self-governing  workshops  or  what  is  usually  styled 
co-operative  production. 

And  again: 

The  self-governing  workshop  has,  however,  proved  by 
universal  experience  to  be  inapplicable  to  any  industrial 
undertakings  on  a  large  scale,  and  therefore  affords  us  no 
plan  of  organization  for  the  great  mass  of  modern  industry. 
Even  in  the  industrial  enterprise  that  can  be  carried  on  in  a 
small  way,  the  self-governing  workshop,  where  the  workers 
enjoyed  absolute  autonomy,  has  proved  by  long  and  varied 
experience  to  be,  in  all  but  very  exceptional  cases,  neither 
stable,  nor,  so  long  as  it  endures,  economically  efficient,  and 
that  where  any  commercial  success  has  been  attained,  it  will 
be  found  that  it  has  been  gained  when  there  is  a  close  market, 
nearly  always  a  partially  tied  market,  such  as  co-operative 
stores.^ 

The  industrial  unrest  in  Europe  has  given  opportunity 
for  the  radical  labor  leaders  to  make  their  opinions  more 
pronounced.  In  the  confusion  of  such  times,  when  the 
minds  of  the  great  mass  of  men  are  not  clear  on  the  issues 
at  stake,  there  is  always  an  opportunity  for  radicalism  to 
have  vehement  expression.  It  is  also  true  that  at  such 
times  confused  and  inexact  terminology  may  be  very 
dangerous.  It  is  for  this  reason  that  the  subject  of 
management  is  taken  up  at  this  point  and  discussed  in 
detail. 

§  2.     Little  Attention  Given  to  Management 

In  the  whole  discussion  of  labor  and  its  rewards,  both 
in  Europe  and  this  country,  there  is  a  lack  of  under- 
standing as  to  the  function  and  wages  of  management  in 
industry.  The  British  workers  often  regard  management 
and  capital  as  jointly  antagonistic  to  labor.  On  the  side 
of  employers  there  is  little  disposition  to  analyze  the 
general  term  "profits"  and  find  out  how  much  of  their 
gross  return  is  due  to  the  mere  possession  of  capital  (either 
invested  or  borrowed);  how  much  to  insurance  against 
the  various  risks  of  bad  debts,  seasons,  unexpected 
panics,  wars,  obsolete  machinery  due  to  new  inventions, 
etc.;  and  how  much  to  brains  and  skill  of  management. 
Such  ariil)ij.Mnly,  where  the  owner  of  the  cajMtal  is  also  his 

'  Sidney  Webb:     Cominitlcc  of  the  I''abian  Research  Department,  1916. 

46 


own  manager,  is  perhaps  natural;  but  in  these  days  of 
large  production,  which  has  necessitated  the  use  of  the 
corporation,  the  separation  of  the  management  from  the 
shareholders  (or  owners  of  capital)  is  known  to  all. 
Moreover,  as  concerns  grow  larger  and  operations  become 
more  extensive,  a  division  of  the  various  duties  of  the 
management  into  separate  branches  has  become  in- 
evitable. Such  a  breaking  up  of  what  was  once  regarded 
as  the  function  of  one  manager  has  thrown  much  light  on 
the  relation  of  management  to  the  other  necessary  factors 
of  production. 

In  trying  to  get  a  practical  understanding  of  the  function 
of  management  it  is  clear  that  it  covers  the  following 
heads: 

(a)  Buying  of  materials  at  the  right  time;  foreseeing 
market  conditions  often  throughout  the  world,  and  deciding 
how  far  to  go  in  storing  supplies  ahead.  Questions  of  foreign 
imports  and  the  price  of  exchange  are  to  be  mastered. 

{b)  Technical  processes.  The  state  of  the  arts  in  all  coun- 
tries, the  power  to  decide  whether  a  new  invention  will  be  a 
commercial  success,  good  judgment  in  adjusting  machinery 
to  floor  space,  and  sequence  of  processes,  are  matters  lequiring 
a  special  training  for  years  in  any  one  industry. 

(c)  Selling.  To  know  accurately  home  and  foreign  mar- 
kets, to  devise  the  best  selling  agencies  for  a  particular  kind 
of  product,  to  know  when  to  sell  and  at  what  price,  is  vital  to 
the  continuance  of  the  industry. 

(d)  Financing  all  operations  involved  in  buying  and  selling, 
determining  the  form  of  credit,  discriminating  among  buyers 
as  to  integrity  and  promptness  of  payment,  introducing  cost 
accounting,  borrowing  capital,  discounting  paper,  while 
dependent  on  an  expert  knowledge  of  banking  at  home  and 
abroad,  require  a  very  exceptional  ability  among  managers. 

(e)  Organization.  The  capacity  to  organize  an  industry 
into  a  well-knit  whole,  to  know  human  nature,  and  to  have 
an  instinct  for  selecting  the  right  man  for  a  given  duty,  to 
keep  all  parts  of  the  institution  in  proper  co-ordination,  to 
reserve  leisure  to  think,  and  to  keep  a  grasp  on  the  industrial 
tendencies  of  the  whole  world,  is  essential  to  the  highest  type 
of  an  executive. 

The  industrial  manager  is  not  a  product  of  books  or 
education.  He  is  born,  not  made.  Training  and  educa- 
tion will  add  to  his  intelligence  and  power,  but  his  bent  is 

47 


intrinsic.  He  is  found  only  by  being  tried  out  in  actual 
experience.  He  comes  to  the  top  only  by  virtue  of  a  great 
need  for  such  men  and  by  a  demonstration  of  his  capacity 
to  satisfy  that  need.  An  artist  may  make  a  poor  mathe- 
matician and  the  son  of  a  rich  man  may  make  a  poor 
manager,  while  the  son  of  the  soil  may  develop  a  capacity 
for  organization  which  may  place  him  in  control  of  a 
house  named  after  a  founder  of  years  long  gone  by.  The 
manager  is  the  pivot  of  success  for  any  concern.  He  is 
the  most  important  figure  in  the  life  of  industry.  He  it 
is  who  makes  employment  possible  for  a  labor  force  of 
thousands;    and  yet  he  is  almost  always  a  salaried  man. 

§  3.     Manager  a  Skilled  Laborer 

It  becomes  obvious,  then,  that  a  manager  is  a  man 
paid  for  certain  very  necessary  services  to  industry.  He 
is  not  paid  for  the  possession  of  capital.  If  one  were  asked 
to  define  any  form  of  labor,  it  would  be  said  that  a 
laborer  is  a  person  who  provides  a  service  to  industry, 
either  physical  or  mental,  in  return  for  an  agreed  upon 
payment.  Therefore,  a  manager  is  a  member  of  the 
laboring  classes,  only  he  is  distinguished  by  being  a 
highly  skilled  laborer.  The  services  he  renders  are  those 
of  a  human  being  employed  in  industry.  His  function  is 
that  of  a  rare,  skilled  worker. 

When  using  the  word  "labor"  it  Is  to  be  remembered 
that  it  is  general  In  its  meaning,  like  the  word  "trees." 
There  are  various  kinds  of  labor  just  as  there  are  various 
kinds  of  trees.  From  the  unskilled  manual  laborer  with 
the  pick  and  shovel  there  are  strata  of  the  slightly  skilled, 
the  trained  artisan,  the  skilled  mechanic,  the  civil  or 
mechanical  engineer,  the  specialist,  up  to  the  best  known 
organizers.  The  highest  grade  of  labor  differs  from 
another  chiefly  In  capacity  for  better  serving  the  purposes 
of  Industry.  Moreover,  the  wages  of  the  manager  are 
determined  on  the  same  principle  as  that  of  any  skilled 
labor.  That  Is  the  principle  of  scarcity.  If  skilled  car- 
penters were  as  numerous  as  day  laborers  they  could  get 
no  more  than  the  latter.  The  mere  fact  of  skill  produces  a 
limited  class.  Further,  the  skilled  hold  their  own  because 
they  add  either  quantity  or  quality  to  the  product.  There 
is  thus  a  relation  between  what  they  produce  and  what 
they  receive.  If  any  man  taken  at  random  oif  the  street 
were    as    competent    to    manage    successfully    a    bank,    a 

48 


factory,  a  railway,  or  a  shipbuilding  plant,  then  managers' 
wages  would  be  as  low  as  that  of  day  labor.  But,  in  fact, 
good  managers,  because  of  the  difficulties  of  their  posi- 
tions, are  very  scarce,  and  the  demand  for  them,  as  in- 
dustry expands,  becomes  increasingly  intense.  The  man 
who,  during  the  war,  has  shown  high  executive  ability 
has  been  pursued  by  the  offer  of  very  high  wages.  The 
reason  why  one  man  gets  only  $400  a  year  and  another 
gets  $40,000  is  that  marked  capacity  is  rare.  Indeed,  if  a 
manager  is  successful  in  building  up  the  business  of  a  large 
factory  or  a  railway,  —  often  taking  it  out  of  bankruptcy, 
—  he  may  gain  millions  for  his  company,  out  of  which 
his  managerial  wages  form  an  insignificant  fraction.  A 
highly  paid  manager  is,  therefore,  often  the  cheapest  man 
to  his  company.  The  manager  is  a  laborer,  and  it  is  open 
to  any  other  laborer  of  skill  to  obtain  the  wages  of  skill  if 
he  has  the  capacity.  That  is,  the  struggle  for  high  wages 
is  not  primarily  a  struggle  between  labor  on  the  one  hand 
and  capital  on  the  other,  but  a  struggle  between  differing 
grades  of  labor  accordingly  as  they  possess  more  or  less 
industrial  capacity.  To  demand  higher  wages  without  any 
regard  to  capacity  and  skill  leads  only  to  a  deadlock  and  a 
fight  against  a  rising  cost  of  production,  higher  prices, 
and  a  higher  cost  of  living  to  all  persons  having  fixed 
incomes. 

§4.    Directors  as  Managers 

It  is  to  be  noted,  also,  that  although  these  managerial 
functions  may  be  split  up  and  divided  among  various 
persons,  they  do  not  cease  to  exist.  It  has  long  been 
noted,  for  instance,  that  the  directors  of  corporations  who 
represent  the  shareholders,  exercise  managerial  power,  and 
yet  they  do  not  receive  a  direct  salary  for  such  work. 
They  are  the  ones  who  appoint  the  active  executive  man- 
agers to  carry  out  the  general  policy  determined  upon  by 
them.  Thus,  the  success  or  failure  of  business  enterprises, 
expecially  those  of  large  size,  may  depend  more  upon  the 
sound  judgment,  foresight,  ability,  and  industrial  experi- 
ence of  the  directors  than  on  the  executive  chosen  by  them. 
The  executive  head  of  an  establishment  usually  appoints 
the  heads  of  departments,  assistants,  and  superintendents 
and  is  largely  responsible  for  the  working  of  technical 
processes,  yet  he  not  only  has  the  co-operation  of  his 
directors  in  these  matters,  but  their  active  Influence  in 
questions  of  finance,  foreign  markets,  and  organization. 

49 


One  strong  man  among  the  directors,  although  giving  but 
little  time  to  any  one  company,  may  greatly  affect  the 
broad  and  vital  policies  of  the  house.  Such  men  are  more 
often  really  managers  than  the  appointed  executives  work- 
ing on  a  salary.  Without  such  ability  in  management  the 
returns  to  an  industry  would  undoubtedly  be  much  less. 

And  yet  such  directors  receive  no  salary.  Still  they 
contribute  much  to  the  returns.  How,  then,  are  they 
compensated.^  For  if  they  are  not,  this  class  of  men  would 
not  be  developed  nor  be  available  in  raising  the  efficiency 
of  industry.  While  some  act  from  a  desire  to  render  a 
service,  some  from  a  love  of  power,  generally  such  men 
obtain  a  pecuniary  reward  from  their  stock  holdings,  which 
are  often  very  large.  They  are,  in  fact,  recompensed  only 
by  the  larger  dividends  they  receive  as  stockholders  when- 
ever the  success  of  their  policies  brings  in  larger  returns 
to  the  companies  which  they  serve.  Hence,  large  divi- 
dends in  many  cases  are  due  to  the  skill  of  management 
of  men  who  are  not  often  recognized,  but  who  are  never- 
theless the  true  causes  of  industrial  success.  Without 
them  earnings  would  often  disappear.  The  presence  of 
these  earnings  of  skill  is  no  reason  why  they  should  be 
claimed  by  some  other  factor  of  production  that  could 
not  have  been  the  cause  of  them.  They,  moreover,  render 
a  service  to  other  investors.  It  is  well  known  that  in  all 
the  great  industries  the  vast  majority  of  the  stock  holdings 
are  owned  by  persons  able  to  buy  but  a  few  shares. 
Hence,  if  capable  directors  aid  in  the  earning  of  large 
dividends  for  their  own  shares,  the  small  investor  obtains 
the  same  proportional  return  on  his  modest  capital. 

§  5.     Science  of  Management 

It  was  pointed  out  to  your  Commission  that  in  Eng- 
land the  problem  of  management  had  never  received 
serious  study.  The  directors,  it  was  claimed,  were  too 
often  badly  fitted  for  their  posts  and  were  chosen  rather 
for  their  standing  as  financiers,  for  their  power  of  com- 
manding capital,  for  their  ability  to  finance  the  purchase 
of  raw  material  or  to  sell  the  finished  products,  than  for 
their  experience  in  and  capacity  for  production  manage- 
ment. Said  a  member  of  the  Technical  Engineers' 
Association: 

English  industry  needs  tlic  technical  cni^'inccr,  whose  out- 
look is  scientific,  who  knows  science  can  find  a  way  to  produce 

50 


greater  quantities,  not  merely  of  goods,  but  of  comforts  and 
pleasures  of  life.  The  manufacturers  need  such  men,  although 
at  present  they  would  not  look  favorably  either  on  their 
organization  or  on  their  aims.  The  workers  need  such  guid- 
ance, and,  in  their  present  receptive  mood,  are  more  ready 
than  the  employer  to  welcome  such  guidance,  though  they 
would  still  be  very  suspicious  of  such  men,  whom  they  regard 
as  employers'  satellites.  In  general,  the  workers,  though  de- 
manding control  of  industry,  are  aware  that  such  control  can 
only  come  when  the  "staff"  is  on  their  side. 

The  aim  is  to  Isolate  the  problem  of  production  manage- 
ment from  that  of  financing,  of  purchasing,  and  of  selling, 
to  make  this  function  a  separate  science  or  profession. 
The  manager  in  this  sense  will  be  essential  both  to  em- 
ployer and  to  employed.  He  is  to  be  distinguished  both 
from  the  financier  and  the  laborer;  his  field  is  the  science 
of  management;  his  sole  aim  is  to  secure  efficiency  of 
production. 

§  6.  Labor  Demands  a  Share  in  Management 

The  lack  of  knowledge  as  to  the  various  services 
which  are  remunerated  under  the  name  of  "profits"  and 
"dividends"  probably  accounts  for  much  of  the  agitation 
in  favor  of  a  greater  control  of  industry  by  the  workers 
who  provide  no  capital  to  the  industry  in  which  they  are 
employed. 

In  Great  Britain,  where  the  demands  of  labor  have  been 
carried  to  the  greatest  extreme,  various  intentions  as  to 
the  extent  of  control  over  management  have  been  ex- 
pressed. It  is  urged  that  if  the  workers  had  a  larger  share 
in  the  management  of  industry  they  vv^ould  so  modify  the 
methods  of  distribution  that  an  increased  product  would 
increase  wages;  in  that  case  they  claim  that  there  would 
be  no  opposition  by  the  workers  to  exerting  effort  to  en- 
large productivity.  It  was  also  held  that  as  long  as 
companies  showed  large  profits  they  had  the  means  for 
paying  higher  wages.  On  the  other  side,  it  was  claimed  by 
the  employer  that  so-called  profits  were  much  misunder- 
stood, and  were  really  not  in  the  form  of  cash,  but  only  a 
statement  of  what  had  been  taken  from  the  yearly  pro- 
ceeds of  the  industry  for  depreciation,  risk,  and  the 
enlargement  of  the  industry,  so  that  more  labor  could  be 
employed  and  more  product  turned  out  in  the  future; 
that  statements  as  to  earnings  were  misleading,  that  they 

51 


often  were  only  statements  on  paper  of  the  form  in  which 
parts  of  the  proceeds  from  the  sales  of  goods  had  gone  into 
various  forms  of  the  industry.  The  opposition  on  the  part 
of  some  workers  to  the  necessary  setting  up  of  reserves 
and  the  use  of  profits  for  the  expansion  of  business  facili- 
ties is  most  unfortunate. 

It  is  to  be  remembered,  when  organized  labor  refers  to 
the  high  published  rates  of  dividends  of  some  companies 
as  an  evidence  that  they  can  pay  higher  wages,  that  in 
many  cases  the  increased  productivity  yielding  such 
results  has  not  been  traceable  to  the  workers;  in  truth 
it  has  been  due  to  the  devising  minds  in  the  management. 
The  steady  increase  in  wages  during  many  past  decades 
has  often  been  possible  only  because  methods  and 
machinery  have  enabled  a  large  return  to  be  earned  out  of 
which  higher  wages  could  be  paid.  There  are  numerous 
proofs  of  this  general  statement  in  our  own  economic 
history;  but  it  has  been  signally  verified  by  frequent  in- 
stances which  developed  in  the  course  of  war  production 
in  the  United  States. 

§  7.      Co-OPERATION    AS    A    SoURCE    OF    MANAGERS 

The  point  has  been  sometimes  raised  that,  if  organ- 
ized laborers  took  over  the  control  of  industry,  they 
would  not  have  the  managerial  ability  to  carry  on  the 
essential  functions  of  management  in  these  days  of  large 
enterprises.  To  this  it  has  been  replied  that  the  workers 
have  shown  managerial  skill  of  a  high  order  in  the  co- 
operative associations  of  Great  Britain.  Beginning  with 
simple  distributive  co-operation  which  required  little 
executive  ability,  the  movements  spread  to  productive 
establishments  for  the  manufacture  of  goods  for  the 
distributive  societies.  Thus  wholesale  operations  were 
greatly  extended.  Without  doubt  the  presence  of  the 
need  may  have  drawn  out  managerial  ability  from  un- 
expected sources;  but,  as  in  our  savings  banks  and 
friendly  societies,  men  of  standing  and  business  experience 
In  the  community  have  gratuitously  aided  the  productive 
co-operative  movement  out  of  public  spirit.  Thus  the 
facts  do  not  necessarily  show  that  labor  can  provide  the 
trained  managerial  ability  for  conducting  large  enter- 
prises. 

It  is  to  be  kept  in  mind,  however,  that  it  is  folly  to  sup- 
pose that  executive  power  belongs  to  any  one  class,  either 

52 


to  the  laboring  or  to  the  employing  class.  A  man  is 
marked  for  managerial  tasks,  not  because  he  is  poor  or 
rich,  but  because  of  his  individual  qualities.  In  this  day 
of  large  enterprises  many  a  man  of  executive  power  has 
risen  from  the  humblest  origins.  This,  however,  does  not 
prove  that  organized  labor,  should  it  get  the  control 
of  industry,  would  be  able  to  command  from  its  own  ranks 
men  of  pre-eminent  managerial  capacity  who  would  work 
for  the  average  wages  of  the  usual  working-man.  If  wages 
of  management,  for  great  industrial  skill,  are  to  be  wiped 
out  in  order  to  increase  the  wages  of  less  skilled  workers, 
the  inducement  to  skill  and  efficiency  of  production 
disappears. 

Some  explain  that  labor  organizations  aim  only  at  a 
share  of  control  over  shop  conditions;  but,  in  fact,  the 
most  intelligent  and  enterprising  leaders,  while  admitting 
that  laborers  may  not  now  have  in  their  ranks  men  com- 
petent to  assume  charge  of  all  the  functions  of  manage- 
ment, evidently  look  forward  to  the  assumption  of  the 
supreme  tasks  of  management  sooner  or  later.  Their  pur- 
pose, however,  in  attempting  to  gain  control  is  not  so 
much  to  increase  the  efficiency  of  production  as  to  obtain 
a  position  of  authority  through  which  wages  may  be  fixed 
at  a  rate  more  satisfying  to  the  recipients  of  wages.  That 
is,  it  is  assumed  that  wages  can  be  increased  at  the  expense 
of  some  other  factor  in  production.  In  the  event  that  the 
workers  should  obtain  control  of  industry,  it  is  clear  that 
it  would  result  only  in  an  exchange  of  managers.  They  do 
not  seem  to  realize  that  managerial  jobs  would  be  found 
only  for  a  few  new  managers  in  place  of  the  old  and  that 
the  new  managers  would  have  to  succeed  in  all  the 
functions  above  indicated;  otherwise,  the  business  would 
fail  and  loss  to  all  would  follow. 


53 


CHAPTER   IV 

ORGANIZATIONS   OF  WORKERS   AND   OF 
EMPLOYERS 

§  1.     Great  Britain 

Most  American  readers  are  not  familiar  with  the 
many  different  types  of  industrial  and  political  labor 
organizations  or  of  employers'  associations  abroad.  For 
the  sake  of  convenient  reference,  therefore,  a  list  is  given 
here  of  the  most  important  of  such  organizations,  with 
a  brief  sketch  of  their  development  and  aims.  This  list  is 
not  intended  to  be  complete,  but  to  identify  those  associa- 
tions that  have  most  influence. 

Labor  organizations  may  be  divided,  according  to  their 
activities,  into  industrial  and  political.  The  two  are  not 
always  fully  differentiated,  but  intimately  interwoven 
both  in  structure  and  functioning.  The  political  organiza- 
tion does  not  include  all  trade  unionists  nor  is  its  mem- 
bership confined  only  to  trade  unionists.  The  industrial 
organization  ranks  first,  both  in  time  and  in  strength  of 
numbers  and  influence.  Herewith  are  listed  the  main 
organizations: 

The  Trade  Union  Congress,  which  is  the  annual  deliberative 
assembly  of  the  trade  union  world,  represents  what  its  friends 
describe  as  "the  largest  and  strongest  organized  force  ever 
created  by  any  class  in  any  country  for  the  purpose  of  mutual 
protection."  It  dates  from  1868,  when  34  delegates  met  to 
represent  the  interests  of  118,367  trade  union  members.  By 
1918,  its  jubilee  year,  it  had  grown  to  comprise  881  delegates, 
representing  4,532,085  members  from  262  unions.  It  com- 
prises most  of  the  large  unions  and  federations.  Delegates 
are  elected  on  the  basis  of  the  numerical  strength  of  their 
unions,  and  vote  in  a  block.  The  Miners'  Federation,  for 
example,  sent  171  delegates  to  the  Congress  of  1918,  and  thus 
cast  nearly  20  per  cent  of  the  votes. 

There  is  also  a  Scottish  Trade  Union  Congress  with  a 
membership,  in  1918,  of  about  500,000,  and  also  one  for 
Ireland,  whose  membership  cannot  be  ascertained. 

The  program  of  the  English  Trade  Union  Congress  calls 
for  nationalization  and  control  of  railways,  coal  mines,  land, 

54 


canals  and  waterw^ays,  larger  housing  provisions,  and  extended 
educational  facilities. 

Out  of  its  membership,  the  Congress  elects  a  Parliamentary 
Committee,  16  in  number.  Its  functions  are  to  watch  all 
legislation  affecting  labor;  to  initiate  such  legislation  as  the 
Congress  may  direct,  and  to  act  as  an  executive  of  the 
Congress  in  the  interval  between  each  meeting.  The  presen- 
tation and  discussion  of  the  report  of  this  committee  con- 
stitutes a  large  part  of  the  annual  proceedings  of  the  Trade 
Union  Congress. 

The  President  of  the  Congress  is  generally  a  leading  repre- 
sentative of  one  of  the  important  unions. 

Out  of  the  activities  of  the  EngHsh  Trade  Union  Con- 
gress have  sprung  two  other  national  labor  bodies:  the 
Labour  Partyand  the  General  Federation  of  Trade  Unions. 
The  former  Is  a  political  organization,  the  latter  an  en- 
deavor to  obtain  a  strong,  central  Industrial  organization. 

The  Labour  Party  is  a  federation  which  represents  organiza- 
tion of  trade  unionism  for  political  purposes.  The  member- 
ship of  the  party,  which  was  founded  in  1900,  is  recruited 
chiefly  from  the  trade  union  world,  but  includes  trades 
councils,  and  two  socialistic  organizations.  At  its  annual 
confeience  in  January,  1918,  its  membership  was  reported  as 
2,465,131,  of  which  2,415,383  belonged  to  the  affiliated  trade 
unions.  This  figure  for  membership  is  based  on  the  contribu- 
tions made  by  the  unions.  As  it  is  an  established  fact  that 
many  unions  do  not  pay  contributions  in  accordance  with 
their  full  strength,  the  host  of  trade  union  support  is  even 
greater  than  the  figures  indicate. 

In  1917,  the  party  extended  the  basis  of  membership  by 
opening  its  ranks  to  brain  workers,  and  by  giving  women 
four  seats  on  its  national  executive  of  23  members. 

Labor  had  been  represented  in  Parliament  before  the  for- 
mation of  the  Labour  Party.  In  1892,  15  labor  men  were 
elected;  in  1900,  11.  But  from  1900  onwards  Labor  turned 
definitely  towards  political  organization. 

The  decision  in  a  famous  lawsuit,  the  Taff  Vale  Case  (1901), 
having  made  labor  officials  responsible  for  damages  inflicted 
by  union  members  during  a  strike,  exposed  all  trade  union 
funds  to  possible  confiscation.  It  was  this  decision  which 
turned  Labor's  attention  to  politics.  In  the  election  of  1906, 
51  Labour  members  were  elected,  in  the  two  elections  of  1910, 
47  and  48  respectively,  and  in  1918,  59  members. 

The  Secretary  of  the  Labour  Party  is  Mr.  Arthur  Henderson, 
while    on    the    national    executive  are   J.    R.    Clynes,    M.P., 

55 


formerly  Food  Controller,  Sidney  Webb,  Ramsay  McDonald, 
and  Robert  Williams.  Among  its  parliamentary  represen- 
tatives are  John  Hodge,  M.P.,  formerly  Minister  for  Pensions. 
Two  members  of  the  Coalition  Ministry  formerly  belonged  to 
it,  viz.,  G.  N.  Barnes  and  G.  H.  Roberts,  both  of  whom  have 
held  the  positions  of  Minister  for  Labour.  The  two  latter 
withdrew  from  their  party  in  November,  1918,  when  it  severed 
the  party  truce. 

The  administrative  connection  between  the  industrial 
section  as  represented  by  the  Trade  Union  Congress  and 
the  poHtical  section,  represented  by  the  Labour  Party,  is 
not  self-acting.  The  Labour  Party  does  not  report  to  the 
Trade  Union  Congress,  but  its  members  and  leaders  take  a 
dominating  part  in  discussions  and  secure  a  solid  backing 
from  the  trade  unionists.  To  secure  united  action,  an 
organization,  known  as  the  Joint  Board,  has  been  set  up. 

The  Joint  Board  may  be  described  as  the  machinery  through 
which  the  aims  common  to  the  industrial  and  political 
sections  of  the  Labour  movement  are  realized.  It  was  in- 
stituted, originally,  in  1905,  to  consist  of  representatives  of  the 
Parliamentary  Committee  of  the  Trade  Union  Congress,  the 
executive  committee  of  the  Labour  Party,  and  the  managing 
committee  of  the  General  Federation  of  Trade  Unions.  Its 
purpose  and  aim  were  to  organize  for  united  action  in  the 
electoral  campaign  of  1906.  It  has  served  to  focus  the 
opinion  of  organized  labor  and  has  guided  industrial  policy 
and  Parliamentary  action. 

In  1916  the  action  of  the  Trade  Union  Congress  in  Birming- 
ham led  to  the  reconstitution  of  the  Board  without  participa- 
tion by  the  General  Federation  of  Trade  Unions. 

Prior  to  using  the  political  weapon,  the  Trade  Union 
Congress  sought  to  gain  greater  strength  for  industrial 
action  by  federations  within  its  membership.  Of  these  the 
only  one  formed  is  the  General  Federation  of  Trade 
Unions. 

The  General  Federation  of  Trade  Unions  was  established  in 
1899  with  an  initial  membership  of  43  unions  and  343,000 
individuals.  In  1914  its  union  membership  was  146;  in  1918 
its  individual  membership  was  1,100,000,  comprising  about 
one-fourth  of  the  organized  unionists  of  the  country. 

It  is  virtually  a  strike  insurance  and  benefit  society.  Its 
members  pay  contributions  at  a  regular  rate  per  member, 
and  receive  a  certain  rate  of  benefit  when  their  members  are 
on  strike.    Its  financial  position  has  been  gravely  burdened  by 

56 


the  labor  unrest  of  this  century,  while  several  of  the  large  and 
wealthy  unions  which  had  belonged,  withdrew  from  it.  Its 
membership  now  consists  of  the  cotton  operatives,  the  dockers, 
and  many  small  craft  unions. 

It  prefers  to  act  by  industrial  rather  than  by  political 
means,  and  under  the  conservative  leadership  of  its  Secretary, 
Mr.  W.  A.  Appleton,  was  becoming  somewhat  divorced  from 
the  general  labor  movement.  The  Trade  Union  Congress  of 
1916  objected  to  the  overlapping  which  resulted  from  its  repre- 
sentation on  the  Joint  Board,  and  has  practically  banned  it. 

More  recently,  dissatisfaction  with  the  achievements  of 
the  Labour  Party  has  produced  a  powerful  revival  within 
the  trade  union  party  for  industrial  federation  of  industrial 
combinations.  The  motive  of  this  movement  is  to  secure 
joint  action  in  case  of  an  industrial  dispute  of  national 
extent. 

The  Triple  Alliance,  the  first  of  these  federations,  was 
formed  in  1915  from  the  three  most  powerful  union  federations 
in  Great  Britain;  viz.,  the  Miners'  Federation,  the  National 
Union  of  Railwaymen,  and  the  National  Transport  Workers' 
Federation.  The  miners  have  800,000,  the  railwaymen 
350,000,  and  the  transport  workers  250,000  members.  This 
group  of  unions  has  power  to  impose  economic  paralysis  upon 
the  country.  They  may  act  in  matters  of  a  national  character, 
and  may  not  take  action  likely  to  affect  the  others  until  such 
proposal  has  been  submitted  to  the  joint  body  for  considera- 
tion. Fortunately,  all  three  bodies  must  be  unanimous  before 
action  is  taken. 

The  constituent  members  of  the  Triple  Alliance  are  among 
the  largest  and  most  powerful  unions  in  Great  Britain. 

The  Miners''  Federation  of  Great  Britain  is  a  federation  of 
18  district  associations  strongly  centralized.  Its  800,000 
members  comprise  85  per  cent  of  the  persons  employed  in  or 
about  mines,  except  craft  unions.  Its  dominant  member  is 
the  Miners'  Federation  of  South  Wales,  which  is  so  highly 
socialistic  as  to  be  almost  syndicalist.  By  reason  of  its 
members,  its  organization,  and  its  policy,  the  Miners'  Federa- 
tion is  likely  greatly  to  influence  British  trade  unionism  for 
many  years.  Its  President,  Robert  Smillie,  is  also  Chairman 
of  the  Triple  Alliance,  and  is  today  a  dominating  figure  in 
British  trade  unionism.  He  was  the  driving  force  behind  the 
demands  of  the  miners  which  led  to  the  Coal  Commission. 

The  National  Union  of  Railwaymen  resulted  from  amalga- 
mation in  1913  of  three  railwaymen's  unions,  with  a  total 
membership    then    of    170,000.      Its    membership    has    now 

57 


doubled;  in  fact,  the  figure  supplied  to  the  Trade  Union 
Congress  in  1918  was  402,000  members.  This  union  is 
strictly  industrial,  comprising  all  persons  engaged  in  the 
industry,  with  the  exception  of  a  craft  union,  the  Locomotive 
Engineers  and  Firemen,  with  only  38,000  members,  and  a 
professional  union,  the  Railway  Clerks'  Association,  with 
66,000  members. 

The  most  influential  man  in  the  union  is  its  Secretary, 
Mr.  J.  H.  Thomas,  M.P.,  one  of  the  great  orators  of  the  labor 
movement  and  one  of  its  sanest  and  most  trusted  leaders. 

The  National  Trans-port  Workers^  Federation  embraces 
thirty  unions  of  land  and  water  transport  workers,  which 
amalgamated  in  1910.  Its  membership  is  estimated  at  a 
quarter  of  a  million  members. 

The  moving  figure  in  the  Federation  is  the  Secretary, 
Robert  Williams,  who  belongs  to  the  more  revolutionary 
type  of  labor  leaders.  While  a  member  of  the  national 
executive  of  the  Labour  Party,  he  disbelieves  in  parliamentary 
action,  preferring  the  method  of  the  strike  for  the  achievement 
of  industrial  aims. 

A  general  movement  towards  amalgamation  and  federa- 
tion has  characterized  trade  unionism  in  Great  Britain 
since  about  1911.  Two  of  the  constituent  members  of  the 
Triple  Alliance  came  Into  existence  as  a  result  of  that 
tendency.  Other  federations  have  been  formed  In  the 
building  and  the  textile  trades,  among  tramway  and 
women  workers,  the  iron  and  steel  trades,  and  general 
laborers. 

The  Iron  and  Steel  Trades  Confederation  is  a  fine  achieve- 
ment towards  centralizing  trade  union  organization  and 
securing  stability  and  industrial  peace  in  the  industry.  It  was 
formed  in  1917  out  of  four  unions  in  the  iron  and  steel  trades. 
Its  total  membership  is  about  75,000,  and  consists  entirely  of 
highly  skilled  men,  who  maintain  harmonious  relations  with 
employers.  Its  secretary  is  Mr.  Arthur  Pugh,  vice-chairman 
of  the  executive  committee  of  the  National  Alliance  of 
Employers  and  Employed. 

The  National  Federation  of  General  Workers  is  a  federation 
of  unskilled  workers.  It  was  formed  in  May,  1917,  out  of 
seven  unions  of  general  workers  with  a  total  membership 
of  over  700,000,  including  a  number  of  women  workers. 
Although  this  is  an  industrial  union,  it  is  by  no  means  militant. 
Its  objects  are  to  take  common  action  on  wage  movements 
and  questions  of  women's  labor,  to  approach  government 
departments  on  behalf  of  affiliated  unions,  and  "to  maintain 
greater  harmony  among  the  afiiliated  members." 

58 


The  Federation  of  Engineering  and  Shipbuilding  Trades 
is  a  loosely  knit  federation  of  27  unions  with  a  membership 
in  1913  of  nearly  600,000.  It  was  concerned  very  largely  with 
the  questions  of  demarcation  between  the  rival  craft  unions, 
which  composed  it,  and  with  the  discussion  of  common  objects 
and  grievances. 

The  Amalgamated  Society  of  Engineers,  which  has  since 
seceded  from  the  above  federation  is  a  powerful  craft  union 
with  about  275,000  members.  It  dates  back  to  1851.  By 
reason  of  the  fact  that  its  members  are  scattered  through  many 
industries  and  because  of  its  strict  defense  of  craft  privileges 
against  the  unskilled  and  semi-skilled,  it  has  occupied  a 
prominent  place  in  the  disputes  and  discussions  in  the 
engineering  trades  since  1914. 

§  2.     Education  of  Labor  Officials 

No  account  of  British  trade  unionism  can  be  complete 
without  including  a  statement  of  the  efforts  to  promote 
education  for  the  workers  of  the  country.  Three  organ- 
izations among  those  which  aim  to  promote  such  culture 
have  acquired  some  celebrity  and  influence. 

Ruskin  College,  Oxford,  was  established  in  1899  for  the 
purpose  of  providing  education  in  the  social  sciences  for 
working  class  students.  It  is  a  residential  college.  Many 
of  its  graduates  have  become  leading  officials  in  the  trade 
union  world.  The  administration  is  in  the  hands  of  repre- 
sentative labor  leaders,  and  the  college's  chief  support 
comes  from  trade  unions  and  kindred  institutions. 

The  college  conducts  a  correspondence  course  which  is 
very  largely  availed  of,  and  arranges  conferences  on  in- 
dustrial questions.  These  conferences  receive  the  support  of 
the  Trade  Union  Congress. 

The  Central  Labour  College,  London,  arose  from  a  strike  in 
Ruskin  College,  in  1909,  against  the  growing  conservatism, 
as  it  was  deemed,  of  the  older  college.  The  new  college  was 
founded  on  the  twofold  principle  of  the  necessary  antagonism 
of  interests  between  capital  and  labor,  and  of  the  necessity 
of  a  class  conscious  education  of  the  workers.  The  college 
is  practically  supported  and  owned  by  the  National  Union 
of  Railwaymen  and  the  South  Wales  Miners'  Federation. 
Classes  are  organized  in  local  centers  under  tutors  who  have 
been  educated  in  the  Central  Labour  College.  These  preach 
the  idea  of  industrial  unionism  and  teach  Marxian  economics 
and  especially  the  Marxian  doctrine  of  economic  determinism. 

The  Workers^  Educational  Association,  founded  in  1903  by 
Albert  Mansbridge  and  a  small  group  who  recognized  the 

59 


connection  between  a  higher  level  of  general  education  and 
any  distinct  social  advance.  In  1907  co-operation  was 
effected  with  the  universities,  and  joint  committees  of 
nominees  of  the  universities  and  of  the  workers  were  set  up  in 
most  large  centers  of  England.  The  chief  characteristic  of 
the  association  is  that  it  has  organized  working  people  to  seek 
their  own  education.  A  three  years  course  is  sketched  for 
each  tutorial  class,  which  has  the  right  to  select  its  own 
course  of  study.  In  general,  economics  and  industrial  history 
are  chosen.  Though  its  membership  is  only  10,000,  it  is 
recognized  as  a  powerful  agency  towards  satisfying  the 
educational  aspirations  of  adult  labor.  Although  it  is  at- 
tacked by  the  Central  Labour  College  as  reactionary.  Cole 
says,  "As  training  grounds  for  active  labor  workers  and 
officials,  they  have  so  far  proved  not  inferior  to  the  classes 
of  the  Central  Labour  College."  Its  President  is  Rev.  William 
Temple,  son  of  the  late  Archbishop  Temple.  The  association 
also  includes  among  its  supporters  many  of  the  intellectuals 
in  England  and  Scotland. 


§  3.     French  Labor  Organizations 

The  workers  of  France  are  organized  into  syndicats, 
which  correspond  to  our  trade  unions.  These  syndicats 
are  organized  in  one  or  both  of  two  ways.  They  are 
federated  into  national  federations,  on  the  one  hand,  or 
into  local  Bourses  de  Travail  on  the  other.  These 
Bourses  ("locals"  or  trade  councils)  are  themselves 
united  in  a  National  Federation  of  Bourses.  The  national 
federations  of  industry  and  these  departmental  federa- 
tions of  the  Bourses  constitute  the  Confederation  Generate 
du  Travail.  No  union  may  belong  to  the  latter  except 
through  membership  of  one  or  other  of  the  two  forms 
of  federations. 

The  number  of  syndicats  organized  in  1914  was  given 
as  4,846,  with  1,026,303  members,  of  whom  89,364  were 
women.  Out  of  these  4,846  unions,  4,380  were  linked 
into  201  larger  federations,  covering  839,331  members. 

In  addition  to  this  organization  of  industrial  workers, 
there  are  found  organizations  whose  members  are  not 
confined  to  workers. 

These  syndicats  mixtes  or  jaunes  (mixed  or  "yellow" 
unions)  arc  composed  of  both  employers  and  employed. 
They  are  mainly  catholic  in  composition,  are  friendly  to 
employers,  since  their  rules  forbid  strikes  and  since  they  arose 

60 


as  an  organized  movement  against  what  is  known  as  revolu- 
tionary syndicalism.  In  1914  they  were  233  in  number  and 
had  a  membership  of  51,111.  Little  movement  towards 
federation  has  characterized  them,  since  they  are  largely 
local  in  nature. 

The  Confederation  GSnerale  du  Travail  —  the  General  Labor 
Confederation  —  known  familiarly  as  the  C.  G.  T.  —  dates 
from  1895  and  is  the  French  analogue  of  the  British  Trade 
Union  Congress.  Its  membership  reaches  probably  500,000 
to  600,000  individuals,  but  is  irregular,  because  of  the  objec- 
tion of  French  workmen  to  paying  fees  unless  for  some 
direct  benefit.  Strictly  speaking,  the  C.  G.  T.  is  the  apex 
of  the  Fiench  labor  organization,  in  which  unions,  based  on 
the  industrial  principle,  are  grouped  into  a  number  of  national 
federations,  which,  in  turn,  are  organized  in  the  C.  G.  T.  But 
there  is  little  centralization  and  much  local  autonomy;  large 
union  funds  are  discouraged;  political  action  is  looked  upon 
as  unimportant,  while  the  general  strike  is  regarded  as  the  real 
weapon  of  the  working  classes.  The  C.  G.  T.  thoroughly 
endorses  this  attitude  on  politics  and  the  general  strike;  at 
least  two  thirds  of  its  membership  is  revolutionary,  the  rest 
"reformist."  The  Builders'  Federation,  the  largest  of  the 
affiliated  federations,  and  the  Metal  Workers',  the  third  in 
size,  are  revolutionary;  the  Miners',  the  second  in  size,  are 
"reformist." 

The  Secretary  of  the  C.  G.  T.  is  M.  Leon  Jouhaux,  who 
is  himself  opposed  to  the  general  strike,  and  has  summed  up 
his  advice  to  war  workers  during  the  reconstruction  period 
in  the  formula  —  maximum  production  in  minimum  time  for 
maximum  wage. 

As  in  England,  the  industrial  organization  of  the 
workers  is  paralleled  by  their  political  organization. 
In  the  same  way,  too,  a  small  committee,  like  the  Joint 
Board,  exists  to  maintain  effective  cohesion  and  co- 
operation. 

The  Parti  Socialiste  —  Socialist  Party  —  represents  the 
political  side  of  French  trade  unionism,  its  members,  however, 
being  confined  by  no  means  to  workers.  It  originated  about 
1880.  In  1893  it  elected  40  representatives  to  the  Chamber 
of  Deputies  out  of  602  members.  In  1906  it  was  reorganized 
by  the  late  Jean  Jaures  under  the  title  of  "The  United 
Socialist  Party."  In  that  year  it  returned  54  deputies;  in 
1910,  76;  in  1914,  102.  At  the  same  time  there  was  a  group 
of  Independent  Socialists  with  20  members  in  the  House  of 
Deputies  in  1906;  32  in  1910,  and  30  in  1914.  This  socialist 
group  is  one  of  the  largest  and  most  influential  in  the  Chamber. 

61 


§  4,     Italian  Labor  Organizations 

Labor  organizations  in  Italy  resemble  those  in  France 
inasmuch  as  both  countries  have  a  General  Confederation 
of  Labor  and  a  Socialist  Party.  But  within  each  of  the 
Italian  organizations  there  have  been  divisions  which, 
while  threatened,  have  never  materialized  in  France. 

The  Confederazione  Generale  del  Lavoro  —  General  Con- 
federation of  Labor  —  is  numerically  the  largest  Labor 
organization  in  Italy,  comprising  about  420,000  members. 
Its  organization,  which  dates  from  1906,  is  similar  to  the 
French  C.  G.  T.  Its  political  attitude  is  different,  since  it 
co-operates  with  the  parliamentary  socialists  and  favors 
political  as  well  as  industrial  action.  It  has  an  immediate 
program  of  an  economic,  social,  and  educational  nature, 
maintains  its  own  insurance,  relief,  and  savings  funds,  and  its 
own  employment  bureaus,  and  actively  fosters  the  co- 
operative movement.  Of  its  total  membership,  about  125,000 
belong  to  the  Agricultural  Federation,  and  it  is  among  them 
that  the  co-operative  movement  is  strongest. 

Its  paid  membership  in  1914  was  320,858,  of  whom  195,858 
were  employed  in  industry.  In  1917  its  membership  had 
fallen  to  237,560.  This  decrease  was  due  in  part  to  the 
disturbing  effects  of  the  war,  and  in  part  to  the  attitude  of  the 
C.  G.  L.,  which  adopted  a  "neutralist"  attitude  and  con- 
sistently opposed  intervention  by  Italy  in  the  war. 

The  Unione  Sindicate  Italiana  —  Italian  Syndicalist  Union 
—  is  a  radical  body  which  split  off  from  the  General  Con- 
federation of  Labor  and  adopted  a  purely  revolutionary 
program.  It  has  about  120,000  members.  It  repudiates 
political  methods  of  reform,  and  endorses  direct  action,  the 
general  strike,  and  revolution  in  the  interest  of  the  working 
classes. 

Catholic  unions,  which  are  conservative  and  anti-revolu- 
tionary, both  in  doctrine  and  action,  account  for  about  120,000 
workers,  a  large  proportion  of  whom  are  women. 

Independent  unions,  which  are  not  organized  in  any  one  of 
the  above  groups,  total  about  250,000  members,  and  resemble 
the  American  Federation  of  Labor  in  their  attitude  towards 
politics.  They  restrict  their  activities  to  the  industrial  or 
agricultural  spheres  in  which  they  are  engaged,  and  aim  at 
economic  and  social  betterment  through  "fair  play"  between 
labor  and   capital. 

The  Italian  Labor  Union  was  formed  in  1918  out  of  18  of 
these  independent  unions,  and  a  number  of  other  federations 
and  local  associations.  It  was  founded  by  the  pro-war  Social- 
ists, in  opposition  to  the  General  Confederation  of  Labor, 
and  favored  an  interventionist  policy. 

62 


In  January,  1919,  this  new  federation  claimed  a  membership 
of  162,000  members.  Though  it  favors  political  action  in 
accordance  with  the  policy  of  the  reformist  socialist  group 
to  which  it  is  allied,  it  does  so  with  reservations. 

The    political  organizations    of    the    workers    in    Italy 

comprise    three  distinct    groups    of    socialists,    each    of 

v^^hich    includes  a    large    intellectual    and    middle-class 
following. 

The  Italian  Socialist  Party,  which  dates  in  its  present  form 
from  1906,  is  frankly  revolutionary  in  character.  It  is 
opposed  to  participation  in  the  government,  and,  under  the 
leadership  of  Lazzari  and  of  Serrati,  editor  of  U Avanti, 
the  Socialist  labor  daily,  has  been  violently  opposed  to  Italy's 
participation  in  the  war. 

It  has  about  40  seats  in  the  present  Chamber  of  Deputies 
out  of  a  total  of  508. 

Contact  is  established  with  the  General  Confederation  of 
Labor  by  an  organization  similar  to  that  of  the  Joint  Board 
in  England.  A  committee  from  the  Socialist  deputies  with  the 
officers  of  the  Socialist  party  sits  in  joint  council  with  the 
executive  officers  of  the  General  Confederation  of  Labor  to 
determine  common  action  both  in  Parliament  and  the 
Communes. 

The  Reformist  Socialist  Party  was  expelled  from  the  former 
party  in  1912,  when,  as  the  right  wing  under  the  leadership  of 
Bissolati,  it  opposed  approval  of  the  general  strike.  It  was 
immediately  organized  and  carried  20  seats  in  the  election  of 
1913.  In  1915  it  was  strengthened  by  the  addition  of  the 
more  moderate  leaders  of  the  Socialist  party. 

The  Italian  Socialist  Union  was  formed  in  1918  at  the  same 
time  as  the  Italian  Labor  Union,  in  violent  opposition  to  the 
Italian  Socialist  party.  Its  membership  is  practically  identi- 
cal with  that  of  the  Italian  Labor  Union.  Its  policy  was 
interventionist,  and  consequently  it  has  become  merged  with 
the  Reformist  Socialist  Party. 


§  5.     Employers'  Associations  in  Great  Britain 

Employers'  associations  in  Great  Britain  are  numerous 
and,  since  the  war,  well  organized.  They  consist  of 
local  and  national  associations  in  the  same  industry,  and 
of  national  federations  of  several  industries.  The  follow- 
ing are  only  the  leading  federations  and  associations, 
briefly  characterized: 

63 


The  Federation  of  British  Industries,  which  came  into 
existence  in  1916,  is  a  federation  of  the  trade  associations 
connected  with  the  chief  industries  of  the  country.  Its 
membership  consists  of  national  federations,  associations  of 
controlled  establishments,  and  individual  firms.  In  March, 
1919,  this  membership  was  estimated  at  172  trade  associations, 
15  associations  of  controlled  establishments  and  899  individual 
firms.  Its  members  pay  an  annual  subscription  of  £100 
($486).  Its  purpose  is  to  act  as  an  employers'  parliament, 
representing  to  the  Government  and  the  people  the  collective 
voice  of  industry. 

President:   Sir  Vincent  Caillard. 

Director:   R.  T.  Nugent. 

Address:   39  St.  James  Street, 
London,  S.W.    1. 

The  Engineering  and  National  Employers''  Federation  is  a 
federation  of  employers  in  the  engineering  or  metal  trades 
industry,  formed  very  largely  to  deal  with  problems  concern- 
ing labor,  and  to  negotiate  with  trade  unions.  During  the  war 
the  National  Employers'  Federation,  which  had  hitherto 
maintained  a  separate  existence,  amalgamated  with  it. 
This  federation  had  previously  covered  such  industries  as 
plumbing,   hardwaie,  and  so  forth. 

The  Federation  has  an  agreement  with  the  unions  in  the 
engineering   trades   covering   employment,    piecework,   over- 
time, apprenticeship,  and  provisions  for  avoiding  disputes. 
President:  Sir  Allan  M.  Smith,  K.  B.  E. 
Address:   24  Abingdon  Street, 
London,  S.W.    1. 

The  Shipbuilding  Employers'*  Federation  is  very  similar  in 
composition  and  activities  to  the  Engineering  Federation,  and 
collaborates  with  it  on  most  matters.    It  also  has  an  agreement 
with  the  shipbuilding  unions,  covering  fluctuations  in  wages, 
piecework,  and  provisions  for  settling  disputes. 
Secretary:   A.  R.  Duncan, 
Address:    9  Victoria    Street, 
London,  S.W.    1. 

The  cotton  industry  has  two  federations,  one  of  which 
contains  mainly  the  master  spinners,  the  other  mainly  the 
master  weavers  of  the  industry.  The  former  is  the  Cotton 
Spinners  and  Manufacturers^  Association,  the  latter  the 
Federation  of  Master  Cotton  Spinners.  Both  deal  very  largely 
with  labor  questions,  and  have  a  wcU-dcviscd  scheme  for 
handling  industrial  disputes. 

There  is  also  in  Manchester  an  International  Master  Cotton 
Spinners  and  Manufacturers'*  Association,  which  was  composed 
of  representatives  from  various  cotton  producing  and  manu- 

64 


facturing  countries.    To  this,  however,  American  federations 
in  the  cotton  industry  were  not  associated. 

Cotton  Spinners  and  Manufacturers^  Association: 
Secretary:    William  Stuttard, 
Address:    12  Exchange  Street, 
Manchester. 

Federation  of  Master  Cotton  Spinners: 

Secretary:    John  Pogson. 
Address:    Commercial  Buildings, 
15  Cross  Street, 
Manchester. 

The  British  Electrical  and  Allied  Manufacturers''  Association 
is  an  association  of  electrical  firms,  organized  in  1905  and 
reorganized  in  1918.  Its  purpose  is  to  foster  and  protect  the 
electrical  industry. 

Director  and  Secretary:    D.  N.  Dunlop, 

Address:    King's  House,  Kingsway, 
London,  W.C.    2. 

The  Association  of  British  Chemical  Manufacturers  was 
founded  in  1916,  its  membership  consisting  of  individuals 
or  corporations  engaged  in  manufacture  in  the  chemical 
industries. 

Secretary:    Capt.  George  Mount,  D.  S.  O. 
Address:    166  Piccadilly, 
London,  W.     1. 

The  Woolen  and  Worsted  Trades  Federation  consists  of  a 
number  of  local  associations  dealing  primarily  with  labor 
questions.    It  originated  in  1916. 

Secretary:    George  H.  Wood, 
Address:    18  Pearl  Assurance  Buildings, 
Market  Street, 
Bradford. 

The  Association  of  British  Motor  and  Allied  Manufacturers 
is  a  trade  association  of  individual  firms,  organized  during  the 
war. 

President:    Mr.  H.  C.  B.  Underdown, 
Address:    39  St.  James  Street, 
London,  S.W.    1. 

The  Federated  Association  of  Boot  and  Shoe  Manufacturers 
was  constituted  in  1917  to  deal  with  the  problems  created  by 
governmental  control. 

Secretary:    F.  J.  Marquis, 
Address:    13  Tavistock  Square, 
London,  W.C.     1. 

65 


The  Federation  of  Master  Printers  dates  from  1902  and  in 
1919  consisted  of  about  100  local  associations  with  about  5,000 
members.  It  has  instituted  a  costing  system  which  is  spread- 
ing among  the  employers  and  has  been  endorsed  by  the 
unions  within  the  industry. 

Secretary:    A.  E.  Goodwin, 
Address:    24  Holborn, 

London,  E.C.    1. 

Apart  from  associations  organized  like  the  above, 
and  consisting  of  employers  alone,  is  another  association 
whose  membership  consists  of  both  employers  and 
employees.  This  is  connected  with  employers'  associa- 
tions by  the  facts  that  its  origin  has  largely  to  be  credited 
to  the  Federation  of  British  Industries,  and  that  manu- 
facturers nominate  one  half  of  its  controlling  body. 

This  National  Alliance  of  Employers  and  Employed  was 
formed  in  1917  to  promote  the  active  co-operation  of  em- 
ployers and  employed  in  the  treatment  of  questions  generally 
affecting  labor  and  employment  in  all  trades  and  industrial 
occupations,  and  to  secure  the  welfare  of  the  industrial 
workers  of  the  country  and  the  efficiency  of  its  industries. 

Secretary:    A.  H.  Paterson, 
Address:    64  Victoria  Street, 
London,  S.W.    1. 

§  6.     Employers'  Associations  in  France 

The  organizations  of  employers  in  France  have  tended 
toward  the  type  represented  by  the  Chambers  of  Com- 
merce in  the  United  States.  They  have  sought  to 
deal  with  general  questions  touching  the  industry  as  a 
whole  or  with  questions  of  trade.  Such  subjects  as 
freight  rates,  credit  reports,  insurance  rates,  foreign  trade 
conditions,  come  before  them.  With  the  secretaries  of 
each  are  associated  experts  to  analyze  and  make  available 
the  information  that  comes  in. 

Most  of  them  support  professional  schools,  lecture  courses, 
laboratories,  etc.,  issue  prizes  for  special  work  affecting  the 
trade  involved,  collect  libraries  of  technical  works,  and 
frequently  undertake  social  welfare  work  in  behalf  of  their 
members  and  the  workmen  in  their  plants.  Bulletins  are 
issued  monthly  and  annually,  and  they  are  of  the  greatest 
interest  as  throwing  light  on  the  development  of  the  respective 
trades.' 

'  Franco-American  'I'radc,  Report  to  the  Manufacturers'  Export  Association 
by  the  American  industrial  Commission  to  France,  lOKi,  p.  80. 

66 


They  are  generally  known  as  employers'  syndicats 
{Syndicats  Patronatix).  The  first  employers'  syndicat 
was  organized  in  Paris,  1857,  and  was  called  the  National 
Union  of  Commerce  and  Industry. 

Of  these  employers'  associations  there  were,  in 
1914,  some  4,967.  All  together  their  members  totaled 
403,143,  among  whom  there  were  10,300  women  members.^ 
Industrial  conditions  during  and  since  the  war  have 
given  them  strength  and  activity.  Your  Commission 
was  told  that  French  employers  are  getting  together  as 
never  before. 

There  is  another  type  of  organization  in  France  In- 
volving the  employers.  It  is  called  the  "yellow"  [jaune) 
or  mixed  syndicat,  and  is  made  up  of  a  combination  of 
employers  and  employees.  Of  these  there  were,  in  1914, 
233  syndicats,  with  51,111  members.-  Relatively  weak, 
the  mixed  syndicat  has  still  accomplished  something 
In  bringing  the  workman  into  association  with  the  em- 
ployer. The  purpose  of  such  syndicats  is  very  similar  to 
that  of  employers'  syndicats. 

The  French  employers'  associations,  being  relieved 
from  the  burden  of  a  tremendous  labor  problem,  have 
been  free  to  turn  to  matters  of  trade.  The  Union  of 
Metallurgical  and  Mining  Industries  and  Affiliated 
Industries  Is  a  leading  organization  in  the  world  for 
complete  and  scientific  information.  Your  Commission 
met  with  some  representatives  of  the  Automobile  Associa- 
tion of  France  and  found  them  keenly  alive  to  the  problems 
of  that  industry.  They  were  complacent  about  handling 
the  labor  problem,  but  matters  of  finance,  imports,  raw 
materials  weighed  heavily  with  them. 

§  7.  Employers'  Associations  in  Italy 
Your  Commission  found  a  movement  on  foot  to  organize 
the  employers  of  all  the  Important  Industries  of  Northern 
Italy.  We  were  told  that  the  employers  In  the  metal  In- 
terests are  organized  and  working  together.  The  textile 
manufacturers  also  have  their  organization.  There 
met  in  Turin,  April  23d,  a  convention  of  employers  from 
the  entire  industrial  section  of  Northern  Italy  to  discuss 
the  question  of  the  eight-hour  day  and  the  minimum 
wage.  But,  as  In  France,  the  labor  union  problem  has 
not  brought  them  together  Into  a  complete  organization. 

^Bulletin  de  la  Statistique  generale  de  la  France.     Tome  VII.     Fascicule  III. 
April,  1918,  p.  134. 
2  Ibid. 

67 


CHAPTER  V 

UNIONISM   IN    GREAT   BRITAIN 

§  1.     Present  Tendencies  of  Unionism 

Unionism  plays  a  large  part  in  the  industrial  situation 
in  Great  Britain.  It  is  strong  in  numbers  and  well  or- 
ganized. The  war  has  increased  its  strength,  not  merely 
by  accretion,  but  also  by  leading  to  greater  internal 
cohesion.  Small  units  have  been  amalgamated  into  large 
federations,  and  both  small  and  large  units  have  worked 
towards  greater  unity  in  policy  and  action,  with  greater 
striking  power  as  a  consequence. 

At  the  same  time,  trade  unionists  have  acquired  a 
larger  sense  of  their  political  and  social  importance.  A 
ferment  of  unrest,  directed  mainly  against  the  present 
industrial  structure,  but  with  a  definite  political  reaction, 
has  set  in.  The  workers  are  demanding  a  higher  standard 
of  living  than  they  enjoyed  before  the  war,  which,  trans- 
lated into  economic  terms,  means  more  pay  and  more 
leisure.  At  the  same  time,  they  are  demanding  a  larger 
measure  of  control  over  industry  and  the  nationalization 
of  mines,  railroads,  waterways,  and  shipping. 

While  trade  unionism  is,  in  general,  recognized  as  a 
fact  and  dealings  go  on  between  organizations  of  em- 
ployers and  trade  unions,  the  general  attitude  is  a  source 
of  much  perplexity,  both  to  individual  employers  and 
employers'  associations.  A  spirit  of  concession  and  a 
desire  to  amend  the  evils  of  long  hours  and  low  wages  have 
been  met  on  the  part  of  the  workers  by  demands  that 
make  the  future  of  industry  in  Great  Britain  one  of 
great  uncertainty.  Nevertheless,  the  British  Employer, 
in  general,  is  desirous  of  settling  the  problem  of  labor 
unrest  and  of  finding  a  solution  that  will  do  justice  to  both 
labor  and  industry. 

§  2.     Stricnctii  of  Trade  Unions 

The  strength  of  trade  unionism  in  Great  Britain  is 
measured  by  figures  supplied  to  the  Department  of 
I>al)our  Slaiisiics   and   published   annually  in  The  Labour 

68 


Gazette.  The  latest  figures  carry  down  to  the  end  of  the 
year  1917.^  At  that  period  there  were  known  to  the 
British  Department  of  Labour  Statistics  a  total  of  1,133 
trade  unions,  registered  and  unregistered,  with  a  member- 
bership  of  5,287,500,  of  whom  774,000  were  women.  Of 
this  total,  the  general  labor  group,  with  12  unions,  had 
719,500  members,  the  railway  workers,  with  7  unions,  had 
498,000  members,  the  coal  miners  had  85  unions  and 
918,700  members,  and  the  engineering  group  58  unions 
and  483,600  members.  The  total  figures  cited  above  do 
not  always  include  members  serving  with  the  forces, 
especially  in  the  case  of  the  unions  of  less  skilled  workers. 
There  is  reason  to  suppose  —  as  a  rough  estimate  —  that 
the  membership  of  trade  unions  in  Great  Britain  at  the 
signing  of  the  armistice  was  well  over  five  millions.- 
Convincing  evidence  of  this  growth  is  shown  in  the 
figures  of  the  English  Trade  Union  Congress,  the  member- 
ship of  which  leaped  from  three  millions  in  September, 
1917,  to  four  and  a  half  millions  in  September,  1918. 
Outside  of  this  group  stands  the  General  Federation  of 
Trade  Unions,  with  a  membership  of  a  million,  while  the 
Scottish  Trade  Union  Congress  reports  a  membership  of 
about  half  a  million. 

A  certain  measure  of  the  degree  of  organization  can  be 
obtained  from  the  statistics  of  the  total  "occupied  popu- 
lation," or,  as  the  phrase  goes  in  the  United  States,  of 
those  employed  in  gainful  occupations.  At  the  census  of 
191 P  the  total  "occupied  population"  in  the  United 
Kingdom  was  20,159,356,  of  whom  14,307,507  were  males 
and  5,851,849  females  "ten  years  of  age  and  over." 
Boys  and  girls  between  ten  and  fifteen  years  of  age 
formed  18.3  per  cent  of  the  males  employed  in  England 
and  Wales,  and  10.4  per  cent  of  the  females.  When  these 
are  subtracted,  and  occupations  non-industrial  in  char- 
acter are  excluded,  the  industrial  population  of  England 
and  Wales  over  the  age  of  fifteen  years  in  1911  was  less 
than  eight  million  males  and  less  than  four  million  females. 
When  the  figures  for  Scotland  and  Ireland,  similarly  differ- 
entiated, are  added,  the  number  of  males  above  fifteen 
years  of  age  engaged  in  industry  was  less  than  ten  mil- 
lions, and  of  females  less  than  five  millions.     In  that  year 

^  See  The  Labour  Gazette,  1918,  p.  485. 

^  Compare  with  one  made,  though  unsupported  by  evidence,  in  The  Jthenceum, 
January,  1919. 

'  See  census  of  Great  Britain  and  Ireland,  1911. 

69 


(1911)  the  trade  union  membership  was  officially  placed 
at  3,018,000,  of  whom  275,045  were  women. ^  The  figures 
for  1917  suggest  an  average  unionization  of  between  4-0 
and  50  per  cent,  a  figure  confirmed  by  the  Parliamentary 
Under  Secretary  of  the  Ministry  of  Labour,  Sir  David  J. 
Shackleton,  M.P.,  in  an  interview  with  the  Commission. 

In  treating  of  this  figure  it  must  be  remembered  that  it 
represents  merely  an  average  covering  both  organized  and 
unorganized  trades;  and  that  many  trades  are  highly 
organized.  The  extent  of  organization  is  also  illustrated 
by  the  fact  that  occupations  which  in  the  United  States 
have  almost  no  unions  are  in  England  highly  organized. 
Thus  the  agricultural  laborers  were  reported  at  the 
Trade  Union  Congress  of  1918  to  have  had  80,000  mem- 
bers. There  is  a  National  Federation  of  General  Workers 
with  a  total  membership  of  700,000.  It  is  the  "basic 
industry"  in  Great  Britain  that  has  been  most  thoroughly 
organized.  "One  half  of  the  trade  union  membership  is 
in  the  engineering  and  shipbuilding  industries,  textiles, 
and  coal  mining."^ 

§  3.     Lines  of  Development 

The  recent  development  of  trade  unionism  is  of  more 
than  historical  importance.  The  war  has  led  to  an  in- 
crease in  the  numbers  enrolled  in  trade  unions.  This  is 
shown  by  the  following  table.  In  this,  the  year  1908  is 
taken  as  the  starting  point,  merely  because  it  marks  the 
beginning  of  the  definite  activity  of  the  Labour  Party. 
It  will  be  seen  that,  while  there  was  an  increase  between 
1906  and  1910,  there  was  about  the  wave  of  progression 
an  uncertainty  which  ended  in  1912.  From  thence  on- 
wards the  increase  became  noticeable,  and  grew  more 
persistent  and  stronger  as  the  war  continued. 


•  Labour  Yearbook,  101 0,  p.  ;i()2. 

'Kellogg  and  Cllcasoii:  "  Idritisli   I/alK)ur  and    tlic   War,"    p.    175.      Boni  & 
Liveright,  1919. 

70 


TABLE  I  :  MEMBERSHIP  OF  ALL  TRADE  UNIONS,  GREAT 
BRITAIN,  I906-I917,  WITH  PERCENTAGE  INCREASE  OR 
DECREASE  COMPARED  WITH  THE  PREVIOUS  YEAR,  AND 
INDEX   OF   INCREASE   ON    BASIS   OF  YEAR    I906 


Year 

Membership 
at  end  of  year 

Percentage 

increase  (+) 

or  decrease  ( — ) 

compared  with 

previous  year 

Index  Number 
(190G  =  100) 

1906 

1907 

2,128,635 
2,425,153 
2,388,727 
2,369,067 
2,446,342 
3,018,903 
3,287,884 
3,987,115 
3,918,809 
4,141,789 
4,399,696 
5,287,522 

+  10.0 
+  13.9 

—  1.5 

—  0.8 
+  3.3 
+23.4 
+  8.9 
+21.5 

—  1.7 
+  5.7 
+  6.2 
+  19.1 

100.0 
113.7 

1908 

1909 

112.2 
111.3 

1910 

1911 

114.9 
141.8 

1912 

1913 

1914 

1915 

154.5 
187.3 
184.1 
194.6 

1916 

206.7 

1917 

248.4 

This  table  shows  that  except  for  small  decreases  in  1908, 
1909,  and  1914,  the  increase  in  membership  of  trade  unions 
has  been  continuous  and  large.  The  last  column  of  the 
table  measures  the  extent  of  the  increase  over  the  period. 
Trade  unions  were  in  1917  almost  two  and  a  half  times  as 
strong  in  actual  membership  as  the7  were  in  1906. 

This  general  calculation,  while  significant,  does  not 
reveal  the  specific  movement  of  increase  within  certain 
strategic  industries.  While  all  trade  unions  have  in- 
creased In  numbers,  some  have  increased  in  greater  pro- 
portion, and  their  greater  strength  has  altered  the  center 
of  industrial  movement  and  the  trend  of  trade  union 
development.     The  situation  is  depicted  in  Table  2: 


71 


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72 


05 


From  this  table  It  may  be  seen  that  on  the  basis  of  100 
as  the  Index  for  the  year  1906,  the  groups  of  trades  have 
Increased  during  the  period  1906-1917  in  the  following 
percentages: 

table    3:     index   of   increase    in    groups   of   trades 
1906-1917.     (year  1906=  100) 


Group  of  Trades 


Index 
of   Increase 
(Base  100) 


Building      

Mining  and  Quarrying 

Metal,  Engineering,  and  Shipbuilding 

Textile 

Clothing      

Railway  Service 

Transport  (land  and  water)     .    .    .    . 
General  Labor 


130.6 
165.7 
233.8 
205.5 
250.3 
488.1 
410.3 
658.1 


A  comparison  of  this  table  with  Table  1  shows  that  the 
Increase  in  the  building  trade  and  in  mining  was  below 
the  general  increase  for  the  period.  That  in  textiles  was 
but  slightly  below,  while  in  the  metal  and  clothing  trades 
a  fairly  parallel  movement  was  maintained.  A  great 
increase  in  organization  occurred  in  the  railway  service, 
In  transport,  both  land  and  water,  and  In  general  labor. 
The  building  trades  were  never  well  organized,  owing  to 
their  casual  nature,  and  even  during  the  war  never 
attained  more  than  50  percent  of  their  possible  trade  union 
strength. 

The  miners  have  been  strongly  organized  relatively, 
since  1907,  and  the  Increase  In  their  membership  could 
not,  therefore,  be  so  great.  While  the  engineering  trades 
had  always  been  strongly  organized,  the  great  increase  in 
munition  workers,  who  may  be  classified  into  those  trades, 
led,  during  the  war,  to  a  considerable  increase  In  union 
membership.  The  increase  within  the  railway  service, 
transport  and  general  labor  was  due  to  other  causes  which 
need  further  analysis. 

Since  1911  a  strong  tendency  in  the  direction  of  federa- 
tion and  amalgamation  has  existed  within  the  trade 
union  world.  This  has  been  due  to  a  realization  on  the 
part  of  the  unions  of  a  great  deal  of  overlapping  and 
duplication  In  organization,  leading  to  demarcation  dls- 

73 


putes  and  to  unnecessarily  duplicated  negotiations.  At 
the  same  time  the  need  for  concentrated  activity  was 
urged 

"in  the  face  of  the  growing  combination  on  the  part  of  the 
employers,  and  the  increasing  element  of  state  intervention."  ^ 

The  Transport  Workers'  Federation  was  formed  in  1911, 
and,  as  the  figures  in  Table  2  show,  this  action  led  to  an 
enormous  increase  alike  in  the  strength  and  numbers  of 
organized  transport  workers.  The  campaign  for  the 
amalgamation  of  three  railwaymen's  unions  into  the 
National  Union  of  Railwaymen  was  in  full  swing  in  1911, 
1912  and  1913,  being  consummated  in  the  latter  year. 
The  negotiations  are  reflected  in  the  increase  in  union 
membership  in  the  railway  service  during  those  years. 
But  nowhere  have  amalgamation  and  federation  gone  on 
so  fully  as  among  the  various  general  labor  unions. 
Smaller  bodies  have  amalgamated  with  larger.  Thus,  in 
July,  1918,  the  Dock,  Wharf,  Riverside,  and  General 
Workers'  Union,  representing  about  100,000  members, 
was  amalgamated  with  the  National  Union  of  General 
Workers,  which  had  a  membership  of  300,000.  A  year 
earlier.  May,  1917,  a  federation  was  established  among 
seven  unions  of  general  workers,  known  as  The  National 
Federation  of  General  Workers.  This  movement  towards 
larger  and  fewer  organizations  was  accompanied  by  a 
great  increase  in  the  strength  of  union  organization  in  the 
ranks  of  general  labor.  It  should  be  added  that  in  1914, 
just  prior  to  the  outbreak  of  war,  a  scheme  was  proposed 
for  an  amalgamation  between  the  big  general  labor 
unions  and  the  National  Transport  Workers'  Federation. 

The  crowning  achievement  of  this  movement  towards 
federation  was  the  Triple  Alliance,  finally  consummated  in 
December,  1915.  This  is  an  alliance  among  the  Miners' 
Federation  of  Great  Britain,  the  National  Union  of  Rail- 
waymen, and  the  National  Transport  Workers'  Federa- 
tion for  co-operative  action  in  support  of  each  other's 
demands.  Its  ultimate  aim  is  greater  unity,  greater 
certainty,  and  greater  success  in  industrial  action  for  the 
purpose  of  controlling  the  industries  in  which  their 
numbers  arc  employed.  Its  adherents  believe  that  the 
weight  and  power  it  can  exercise  by  a  threat  to  paralyze 
the  economic  life  of  the  nation  will  enable  it  to  secure  its 
aims  without  striking. 

'Sec  Cole,  G.  D.  H.:  "Introduction  to  'I'radc  Unionism."  Trade  Union 
Series,  No.  4.     Fabian  Research  Departnicni,  pp.  46-53. 

74 


Other  steps  have  been  taken  to  secure  greater  unity  of 
action.  Thus  the  constituent  federation  of  the  Miners' 
Federation  of  Great  Britain,  whose  contracts  with  local 
groups  of  employers  terminated  at  various  times,  have 
arranged  that  all  contracts  shall  terminate  simultaneously, 
so  that  common  action  may  be  taken  by  the  Federation 
as  a  whole. 

Synchronizing  with  these  movements  in  the  direction 
of  greater  unity  of  action  have  been  divergent  movements 
within  the  trade  union  world,  revealing  elements  of 
division  and  disruption.  Some  of  these  have  arisen  out  of 
dissatisfaction,  first,  with  the  results  of  the  political 
activity  of  the  Labour  Party,  and,  secondly,  with  the 
principle  of  political  action.  It  is  charged  that  the  Labour 
Party,  after  more  than  ten  years  in  Parliament,  has 
achieved  little  for  the  worker. 

It  is  held,  that  more  can  be  obtained  by  the  use  of  the 
economic  strength  of  trade  unions  and  by  their  power 
to  strike.  Unionists  holding  this  view  have  devoted  much 
effort  to  the  amalgamation  of  laborers  into  one  general 
industrial  union.  This  one  big  union,  containing  all  the 
workers  in  all  industries,  without  regard  to  craft  or  degree 
of  skill,  could  ultimately  control  production.  It  is  this 
principle  which  led  to  the  formation,  and  which  domi- 
nates the  aims,  of  the  Triple  Alliance.  Its  influence  upon 
the  position  and  influence  of  the  Labour  Party  is  seen  in  the 
published  accounts  of  the  recent  conference  of  that  party 
at  Southport.  At  that  conference,  against  the  advice  of 
experienced  Parliamentary  leaders,  it  was  resolved  by  a 
vote  of  two  to  one,  to  call  upon  the  Trade  Union  Congress 
to  take  "industrial  action"  to  compel  the  British  Govern- 
ment to  abolish  conscription  and  withdraw  its  troops  from 
Russia. 

It  is  evident,  therefore,  that  a  strong  and  almost  un- 
checked tendency  exists  in  British  trade  unionism  to  turn 
aside  from  political  action,  and  to  use  more  direct  and  more 
militant  methods. 

The  significance  of  this  tendency  docs  not  lie  merely  in 
its  method  or  its  ultimate  purpose,  but  in  the  fact  that  it 
has  arisen  from  the  members  rather  than  from  the  leaders 
of  trade  unions.  The  movement,  both  towards  federa- 
tion and  amalgamation,  and  towards  industrial  unionism, 
springs  from  the  "rank  and  file." 

75 


It  has  one  of  Its  material  causes  in  a  loss  of  confidence 
in  trade  union  officials.  The  latter  are  being  reproached 
as  too  conservative  and  bureaucratic.  They  are  said  to 
be  too  far  removed  from  local  conditions  and  from  the 
problems  of  the  workshop.  Though  formerly  workers 
themselves,  they  have  been  so  long  out  of  touch  with 
actual  factory  conditions  that  they  are  deemed  incom- 
petent to  discuss  changes  in  processes  and  their  effects 
upon  terms  and  conditions  of  employment.  Whether  these 
charges  are  true  or  not,  the  fact  remains  that  a  con- 
siderable section  of  trade  unionists  are  dissatisfied  with  the 
leadership  of  the  trade  union  executive  officials. 

This  movement,  though  not  created  by  the  war,  was 
intensified  by  it,  and  given  wider  opportunities  for  its 
manifestation.  It  has  shown  itself  in  two  ways.  In  the 
first  place,  it  produced  a  number  of  strikes  in  violation  of 
agreements  made  by  the  responsible  trade  leaders.  From 
the  famous  strike  on  the  Clyde,  in  February,  1915, 
to  the  Glasgow  strike  of  January,  1919,  this  spirit  of 
revolt  disturbed  both  the  industrial  and  the  trade  union 
world.  In  the  second  place,  it  resulted  in  the  election  by 
the  workers  in  the  shops  and  factories,  of  shop  stewards, 
responsible,  not  to  the  trade  unions,  but  to  those  who  had 
chosen  them.  While  trade  unions  had  long  been  accus- 
tomed to  appoint  shop  stewards  to  carry  out  specific 
functions,  these  shop-elected  stewards,  with  their  pre- 
tensions to  a  more  representative  position  than  the 
executive  officials  of  the  unions,  were  a  divisive  element 
within  the  trade  union  world.  Further,  their  character- 
istics, aims,  and  purposes  are  even  more  significant  than 
their  unconstitutional  relation  to  the  trade  union  move- 
ment. Most  of  them  are  theorists;  some  are  industrial 
unionists,  as  above  defined,  while  others  are  "national 
guildsmcn."    All  of  them  stand 

for  a  greater  clement  of  control  over  industry  by  the  workers 
through  their  industrial  organizations,  for  a  greater  element 
of  trade  union  intervention  in  workshop  management,  for  a 
bigger  say  on  the  part  of  the  rank  and  file  workers  in  determin- 
ing the  conditions  of  their  working  lives.* 

A  full  discussion  of  the  shop  steward  movement  showing 
its  origin,  development,  and  significance  is  given  in  a  later 
chapter. 

'  Cole,  G.  D.  H.:     "Introduction  to  Trade  Unionism,"  p.  56. 

76 


§  4.     Industrial  Unrest 

Our  survey  has  suggested  the  presence  of  much  unrest 
within  the  British  Trade  Union  world.  Many  factors 
have  tended  to  produce  this  result.  Some  of  these  were 
specially  connected  with  the  war  and  its  widespread 
consequences.  Thus  the  fact  that  the  cost  of  living  in 
Great  Britain  had  advanced  faster  than  the  advance  in 
wages  has  been  the  most  widespread  cause  of  unrest.  The 
restrictions  on  personal  freedom  caused  by  the  operations 
of  the  Munitions  of  War  Act,  and  the  blunders  of  Govern- 
ment departments  In  the  administration  of  the  manifold 
matters  connected  with  the  war  have  created  a  want  of 
confidence  in  constitutional  methods  and  orderly  pro- 
cedure that  is  the  seed-bed  of  revolutionary  agitation. 
The  feeling,  engendered  by  the  suspicion  of  much  profiteer- 
ing, that  Inequality  of  sacrifice  had  prevailed,  the  wide- 
spread want  of  housing  accommodation,  and  a  discussion 
of  the  ugly  and  unsanitary  conditions  under  which  many 
lives  are  being  spent,  have  led  to  a  widespread  revolt 
against  existing  social  conditions. 

Behind  all  this  Industrial  unrest  is  the  expressed  aim  of 
the  workers  of  England  for  a  higher  standard  of  living. 
They  are  no  longer  content  with  the  low  wages  and  long 
hours  of  the  pre-war  period.  They  are  demanding,  not 
merely  wages  commensurate  with  the  increase  in  the  cost 
of  living,  but  wages  which  will  improve  their  economic 
position  and  enable  them  to  realize  a  higher  standard  of 
life.  To  this  end  they  consider  that  every  worker  should 
be  granted  by  law  a  standard  minimum  wage.  They  are 
demanding  also  the  reduction  of  working  hours,  and  the 
abolition  of  systematic  overtime,  so  as  to  give  the  workers 
more  hours  out  of  the  shop. 

This  demand  for  higher  wages  and  shorter  hours  Is 
seldom  accompanied  by  recognition  of  the  economics  of 
the  situation.  Thus,  a  demand  is  made  not  merely  for  a 
week  of  48,  but  for  one  of  44  or  40  hours.  This  latter  and 
more  extreme  demand  Is  supposed  to  be  based  on  the 
fear  of  unemployment.  It  was  urged,  for  instance,  In  the 
Glasgow  strike  of  January,  1919,  that  a  reduction  to  40 
hours  was  necessary  to  afford  employment  for  demobilized 
soldiers.  This  argument  reappears  often  in  connection 
with  the  shorter  week,  though,  it  must  be  noted.  It  is 
seldom  heard  In  the  speeches  or  seen  in  the  writings  of 
labor  leaders.  Again,  the  demand  for  higher  wages  Is  not 
associated  with  that  Increased  production  out  of  which 

77 


alone  the  higher  wages  can  be  met.  In  this  respect  the 
situation  in  British  trade  unionism  differs  widely  from 
that  reflected  by  the  motto  of  M.  Leon  Jouhaux,  secretary 
of  the  French  General  Confederation  of  Labor  —  maxi- 
mum production  in  minimum  time  for  maximum  wage. 

In  fact,  the  fundamental  reason  for  labor  unrest  and  the 
most  significant  characteristic  of  British  trade  unionism 
today  is  its  challenge  to  the  present  system  of  industry. 
It  is  aiming  at  a  vast  extension  of  public  ownership  and  at 
a  larger  measure  of  control  over  industry.  Through  public 
ownership  it  believes  that  the  economic  waste  of  competi- 
tion will  be  eliminated,  and,  along  with  the  profits  now 
realized  by  individuals,  made  available  to  the  workers  in 
the  form  of  higher  wages.  A  larger  measure  of  control 
over  industry  is  regarded  as  the  necessary  correlate  of  the 
extension  of  dem-ocracy  to  the  economic  sphere. 

This  challenge  to  the  present  industrial  structure  fur- 
nishes a  part  explanation  for  the  frequency  and  violence  of 
many  strikes.  Men  of  narrow  vision  and  much  theory, 
as  many  of  the  newer  type  of  shop  stewards  are  admitted 
to  be,  are  certain  to  lean  to  violent  methods.  They  would 
overturn  before  rebuilding.  They  reject  compromises 
and  assume  militant  attitudes.  One  of  the  leaders  of  the 
Coventry  strike  in  December,  1917,  writes  in  the  following 
extreme  socialistic  strain: 

It  should  be  obvious  to  the  ordinary  thinking  man  or 
woman  that  the  time  has  arrived  when  we  should  organize 
ourselves  on  a  class  basis,  and  not  one  of  craft,  and  work 
shoulder  to  shoulder,  men  and  women,  with  one  common 
object  in  view  —  that  of  fighting  the  capitalist  class,  who 
have  divorced  the  workers  from  their  rightful  ownership  of  the 
means  of  life. 

Their  appeal  is  to  the  class  war,  —  "the  only  war  that 
really  matters,"  as  they  phrase  it. 

But  the  attitude  of  other  elements  in  British  labor  is 
quite  different.  They  realize  that  the  changes  involved 
in  their  large  program  of  reconstruction  can  only  come 
slowly.  They  recognize  that  there  are  differences  among 
industries  that  need  to  be  considered,  and  that  will 
determine  when  and  how  the  suggested  policies  should 
be  applied.  They  have  no  intention  of  killing  the 
industry  in  which  they  are  engaged,  and  concerning  the 
economic  }:)Osition  of  which  many  of  them  are  well  in- 
formed.    'Lhey  are  quite  radical  in  aiming  at  nationaliza- 

78 


tion;  they  are  buoyed  up  by  the  hope  that  a  spirit  of 
public  service  may  be  created  to  take  the  place  of  self- 
interest,  and  they  believe  that  such  a  spirit  must  be  the 
product  of  education  and  morality.  The  majority  of 
workmen  have  no  liking  for  revolutionary  methods.  On 
the  contrary,  they  support  the  principles  of  law  and 
order.  They  prefer  peaceful  methods  of  settling  dis- 
putes. They  co-operate  with  employers  in  various  ways 
and  meet  them  or  their  representatives  to  adjust  diffi- 
culties. Statements  made  to  the  Commission  show  the 
extent  of  this  tendency: 

The  Federation  has  been  able  to  deal  with,  and  agree 
with,  the  leaders  of  the  union.  The  leaders  of  the  unions  were 
in  general  able  to  discipline  the  men.  The  secretaries  of  the 
unions  were  able  to  keep  members  well  in  hand;  .  .  .  there 
were  no  serious  strikes  during  the  war. 

The  traditions,  of  the  Steel  Smelters'  union  were  all  in 
favor  of  peaceful  bargaining  with  employers,  high  wages,  and 
no  labor  restrictions. 

Mr.  W.  A.  Appleton,  late  secretary  of  the  General 
Federation  of  Trade  Unions,  remarked: 

Among  the  rank  and  file  there  is  a  spirit  of  the  sportsman 
and  a  desire  not  to  do  anything  unfair  or  unjust. 

Mr.  A.  H.  Paterson,  secretary  of  the  National  Alliance 
of  Employers  and  Employed,  gave  the  following  judgment 
of  the  forces  that  could  be  relied  upon  to  preserve  the 
balance: 

The  shrewd  common  sense  of  the  British  workman  was  an 
infallible  safety  valve.  .  .  .  The  Britisher,  whether  employer 
or  workman,  was  an  individualist  in  thought,  and  individuals 
and  unions  can  be  relied  upon  to  act  upon  their  own  judgment. 

While  there  is  much  evidence  in  Great  Britain  of  the 
strength  of  an  organized  minority  trying  to  control  the 
unorganized  majority,  the  sober  common  sense,  stubborn 
individualism,  and  love  for  ordered  and  steady  develop- 
ment can  be  relied  upon.  This  has  already  been  shown  in 
the  reaction  to  the  "industrial  action"  resolutions  of  the 
Labour  Party  conference  at  Southport.  The  Parliamentary 
Committee  of  the  Trade  Union  Congress  declined  to  en- 
dorse them.  The  annual  conference  of  the  Miners'  Federa- 
tion in  July,  1919,  also  refused  to  allow  its  executive 
officials  to  call  a  strike  without  a  ballot  of  the  members. 

79 


On  latest  advices,  the  leaders  of  the  Triple  Alliance  have 
decided  not  to  attempt  a  referendum  of  its  members,  as 
suggested  by  the  annual  Conference  of  the  Miners' 
Federation. 


§  5.     Labor  Definition  of  Collective  Bargaining 

The  chief  method  of  trade  unionism  in  achieving  its 
ends  and  purposes  is  that  of  collective  bargaining.  This 
term  is  defined  in  an  official  English  publication  thus:^ 

Those  agreements  under  which  the  conditions  of  employ- 
ment are  governed  by  the  terms  of  a  bargain  made  between 
employers  or  associations  of  employers  and  a  group  of  work- 
people employed  by  them,  or  an  organization  of  which  these 
workpeople  are  members,  and  which  represents  their  interests 
(as  opposed  to  those  cases  in  which  these  conditions  are 
arranged  between  an  employer  and  the  diflferent  workpeople 
whom  he  employes,  separately). 

This  definition  involves  the  ambiguity  pointed  out 
previously  in  an  analysis  of  the  term.^  It  was  there 
shown  that  a  more  accurate  expression  for  the  essential 
principle  of  collective  bargaining  is  representative  bar- 
gaining, and  that  the  real  issue  in  practice  is  the  entrance 
of  an  outside  party,  a  union  official,  as  a  representative  of 
the  workmen  in  a  shop.  Collective  bargaining,  in  the 
sense  of  group-bargaining  and  as  contrasted  with  indi- 
vidual bargaining,  can  be  had  without  the  existence  of 
unions. 

It  is  clear,  however,  that  the  basis  for  collective  bargain- 
ing is  laid  in  organization,  and  it  is  obvious  that  the  strong 
organization  of  trade  unions  described  above  provides  the 
opportunity  and  the  machinery  used  in  many  trades  for 
obtaining  trade  agreements.  Much  of  the  machinery  in 
use  is  identical  with  that  to  be  described  later,  under  the 
caption  "Conciliation  and  Arbitration,"  this  machinery 
being  intended  for  positive  use  in  furthering  trade 
agreements. 

This  sort  of  negotiation  often  commences  with  local  or 
district  unions.  But  the  large  amount  of  federation  and 
amalgamation  previously  described  has  made  agreements 

'  Great  Britain,  Bf>ard  of  Trade:  Report  on  Collective  Agreements  between 
Employers  and  Workpeople.     London,  1910,  p.  11. 
*  Cf.  Introduction,  pp.  7-9. 

80 


in  most  Industries  nation  wide  in  character,  and  has  con- 
stituted the  national  executive  of  the  trade  unions  the 
supreme  agent  and  the  final  court  of  appeal  in  this  kind  of 
collective  bargaining.  Without  its  consent  or  that  of  the 
district  executive,  no  group  of  trade  unions  is  allowed  to 
make  agreements  on  the  major  matters  involved  in  the 
terms  of  employment,  though  local  and  specific  matters 
may  be  dealt  with  by  the  subordinate  bodies. 

The  major  subjects  dealt  with  are  those  of  rates  and 
methods  of  remuneration  and  hours  of  labor.  Other 
matters  covered  in  these  agreements  are:  the  number  of 
men  to  be  employed,  the  distribution  of  work  in  slack 
times,  the  enticing  away  of  workmen,  demarcation, 
restriction  on  apprentices  and  youthful  labor,  and  a 
multitude  of  details  sometimes  minor  in  degree  or  specific 
to  the  industry. 

During  the  war,  there  has  arisen  an  inevitable  develop- 
ment in  the  direction  of  simple,  non-union  collective  bar- 
gaining within  the  workshop,  —  not  necessarily  in  opposi- 
tion to  the  methods  or  the  arrangements  of  district  and 
national  trade  union  executives,  but  with  more  direct 
reference  to  the  specific  problems  of  the  establishment. 
This  has  arisen  from  the  creation  of  Works  Committees 
which,  among  other  functions,  have  negotiated  with  fore- 
men over  particular  piecework  prices,  bad  material, 
defective  machinery,  and  so  forth. 


§  6.     Conciliation  and  Arbitration 

For  the  settlement  of  disputes  between  workers  and 
their  employers,  the  unions  have  naturally  not  been 
favorably  disposed  towards  any  intervention  from  outside 
which  interfered  with  their  own  influence.  Such  inter- 
vention has  come  from  legislation  and  governmental 
action. 

The  machinery  created  by  Government  consisted  first 
of  a  permanent  court  of  arbitration  set  up  in  1908,  and  an 
industrial  council  created  in  1911.  These  contained  equal 
numbers  of  employers  and  workers,  and  submission  of  dis- 
putes to  their  mediation  was  entirely  voluntary. 

The  exigencies  of  the  war  situation,  however,  brought 
about  a  form  of  compulsory  arbitration.  At  the  Treasury 
agreement  of  March,  1918,  between  the  Prime  Minister 

81 


and  representatives  of  the  trade  unions,  the  latter,  except 
the  Miners'  Federation,  agreed  to  prohibit  strikes  and  to 
submit  all  disputes  to  some  form  of  arbitration.  The 
Munitions  of  War  Act,  passed  in  June,  1915,  placed  the 
determination  of  this  machinery  of  arbitration  under  the 
Board  of  Trade,  specifying  that  the  award  on  any  such 
settlement  should  be  binding  on  both  employers  and 
employed. 

About  the  same  time,  a  strike  in  Glasgow  over  wages 
led  to  the  formation  of  a  Committee  on  Production  whose 
prime  purpose  was  to  stimulate  production.  This  com- 
mittee, in  considering  stoppages  of  work,  recommended 
that  any  differences  arising  between  workers  and  em- 
ployers should  be  referred  to  an  impartial  tribunal  nomi- 
nated by  the  Government.  The  Government  replied 
by  conferring  on  this  committee  of  three  persons  the 
powers  they  asked  for.  The  committee,  therefore,  became 
a  court  of  arbitration  rather  than  a  committee  on  pro- 
duction. Its  personnel  was,  later,  increased  to  9  and  after- 
wards to  12  members  consisting  of  4  chairmen  represent- 
ing the  public,  4  employers,  and  4  labor  representatives. 
It  sat  in  groups  of  three,  each  in  the  capacity  of  an  arbi- 
tration court.  Its  activities,  which  were  term.inated  on 
November  21,  1918,  show  it  to  have  been  the  most  active 
of  the  conciliation  agencies  of  the  country  since  its  forma- 
tion. It  was  on  the  lines  of  its  composition  that  the 
Whitley  Committee  drew  their  proposal  for  a  standing 
arbitration  council.^ 

The  Munitions  Act  was  responsible  for  the  creation  of 
another  measure  of  compulsory  settlement  of  disputes. 
By  its  provisions  there  was  created  a  special  tribunal  for 
each  munitions  area,  consisting  of  a  government  nominee 
as  chairman,  with  two  assessors,  chosen  from  lists  of  em- 
ployers' and  employees'  representatives  constituted  by 
the  Minister  of  Munitions.  Where  women  formed  a  large 
majority  of  the  workers,  a  special  court  was  created  for 
them,  on  which  a  woman  sat  as  the  employees'  repre- 
sentative. 

By  an  act,  the  Wages  (Temporary  Regulation)  Act, 
passed  on  November  22,  1918,  Parliament  provided 
machinery  to  replace  both  the  Committee  on  Production 
and  the  munition  tribunals.  As  defined  by  the  Minister 
of  Labour, 

'  Sec  tlic  Whitley  Committee:  "  Report  on  Conciliation  and  Arbitration." 

82 


the  main  purpose  of  the  new  act  is  to  secure  the  maintenance 
for  a  period  of  six  months  of  the  minimum  wages  generally 
applicable  at  the  date  of  the  signing  of  the  armistice,  .  .  . 
except  in  so  far  as  these  minimum  wages  are  varied  by 
arbitration  or  by  agreement. 

Wages  above  the  minimum  rate  were  to  be  subject  to 
negotiation,  and  as  machinery  for  negotiation  the  act 
provided  interim  arbitration  tribunals,  which  replaced 
the  Committee  on  Production  and  the  munitions  tri- 
bunals. Disputes  were  to  be  submitted  to  these  arbitra- 
tion courts  only  by  the  Ministry  of  Labour,  and  only  when 
both  parties  had  jointly  agreed  to  such  submission.  The 
awards  of  these  tribunals  were  binding  on  these 
parties. 

In  general,  these  measures  of  compulsory  arbitration 
were  disliked  by  trade  unionists.  In  common  with  the 
employers,  they  preferred  to  discuss  the  problem.s  of  their 
industry  only  with  those  familiar  with  its  conditions,  and 
hated  restraint  upon  their  freedom  of  action.  Before  the 
war,  the  machinery  of  conciliation  and  arbitration  estab- 
lished by  governmental  agencies  had  been  aided  by 
voluntarily  created  boards  composed  of  equal  numbers  of 
employers  and  employed.  Thus,  the  Board  of  Trade, 
which  was  the  governm.ent  agency  for  mediation  in  dis- 
putes, and  dealt  in  1913,  the  year  before  the  war,  with  99 
disputes,  was  supplemented  in  that  year  by  the  work  of 
325  voluntary  conciliation  boards  and  standing  joint 
committees.  In  this  pre-war  period  there  had  been 
established  conciliation  boards  in  such  industries  as  coal 
mJning,  iron  and  steel,  engineering,  shipbuilding,  boot  and 
shoe,  cotton  and  building  trades.  During  the  war,  some 
of  these  remained  in  existence,  while  the  Committee  on 
Production  was  used  as  the  medium  to  which  the  majority 
voluntarily  referred  their  differences.  Industries  which 
fell  under  the  control  of  the  Committee  on  Production 
were  often  characterized  by  special  agreements  between 
employers'  federations  and  the  unions  as  to  the  periods 
and  terms  under  which  they  would  refer  their  complaints 
to  the  committee.  Agreements  on  these  lines  were 
entered  into  in  the  engineering  and  foundry,  chemical, 
ship  repairing,  dock  labor,  building,  soap,  and  candle 
industries  and  trades.^ 

'  See  Memorandum  on  Proceedings  of  the  Committee  on  Production,  May, 
1917-April,  1918  (Cd.  9126)  and  May,  1918-November,  1918  (Cd.  70). 

83 


§  7.     Strikes  and  Lockouts 

In  the  achievement  of  its  ends  trade  unionism  uses 
miUtant  as  well  as  conciliatory  measures.  The  militant 
are  the  more  obvious  and  the  more  susceptible  of  measure- 
ment. The  number  of  strikes  and  lockouts  is  carefully 
tabulated  year  by  year.  The  following  table  summarizes 
them  according  to  number  of  disputes,  number  of  work- 
people involved,  and  the  total  number  of  working-days 
lost,  since  the  year  1906. 


TABLE  4:  NUMBER  OF  DISPUTES  BEGINNING  EACH  YEAR, 
NUMBER  OF  WORKERS  INVOLVED  AND  AGGREGATE  WORK- 
DAYS   LOST,    GREAT    BRITAIN,    1906-1918^ 


Year 

Number  of 

disputes  beginning 

each  year 

Number  of 

workpeople 

involved 

Aggregate  work- 
days lost 
each  year 

1906 

1907 

486 
601 
399 
436 
531 
903 
857 

1,497 
999 
674 
581 
688 

1,252 

217,773 

147,498 
295,507 
300,819 
515,165 
961,980 

1,463,281 
688,925 
448,529 
445,936 
284,396 
820,727 

1,096,828 

3,028,816 
2,162,151 

1908 

1909 

1910 

1911 

10,834,189 
2,773,986 
9,894,831 
10,319,591 
40,914,675 
11  630,732 

1912 

1913 

1914 

10,111,337 

1915 

1916 

2,969,700 
2,599,800 

1917 

5,513,900 

1918 

6,237,100 

Analysis  of  this  table  shows  how  much  labor  unrest 
existed  prior  to  the  war,  culminating  in  1912  in  a  number 
of  serious  and  long  continued  strikes.  The  year  1914 
promised  to  surpass  all  but  the  year  1912.  During  the 
first  seven  months  of  1914  there  were  836  disputes  affecting 
423,000  workers.  The  industrial  truce  which  followed  the 
declaration  of  war  reduced  the  disputes  for  the  remainder 
of  the  year  to  137  in  number,  affecting  only  23,000  workers. 
The  industrial  truce,  however,  existed  only  in  name, 
though  the  strike  record  for  the  years  1915,  1916,  and  1917 
showed  some  diminution  in  numbers,  duration,  and  in- 
tensity of  strikes.  The  year  191<S,  however,  was  stormier 
than  any  year  except  1913.  The  majority  of  disputes  in 
1918  were  over  demands  for  advances  in  wages,  though  a 
large  proportion  of  the  remainder  were  over  trade  union 

'  From  Labour  Gazette  and  official  publications  for  years  mcnlioned. 

84 


questions.  It  is  obvious  that,  as  the  war  progressed,  the 
strike  and  forcible  methods  for  redress  of  grievances  were 
coming  into  greater  favor. 

Comparison  of  the  early  months  of  this  present  year 
(1919)  with  that  of  the  previous  year  only  tends  to 
strengthen  the  impression  that  British  labor  is  becoming 
more  and  more  militant.  A  statement  of  comparison 
between  the  first  five  months  of  the  two  years  1918  and 
1919  follows  :i 


TABLE  5:  COMPARISON  OF  TRADE  DISPUTES,  GREAT 
BRITAIN,  JANUARY-MARCH,  I9I9,  AND  JANUARY-MAY, 
I919,  DIVIDED  ACCORDING  TO  GROUPS  OF  TRADES,  AND 
NUMBER,    EXTENT,   AND   DURATION   OF   DISPUTES^ 


January  to  May,  1918 

January  to  May,  1919 

Groups  of  Trades 

No. 
of 
dis- 
putes 

Number  of 
workpeople 

involved 
in  all 

disputes 
in  progress 

Aggregate 
duration  in 

working- 
days  of  all 

disputes 
in  progress 

No. 

of 
dis- 
putes 

Number  of 
workpeople 

involved 
in  all 

disputes 
in  progress 

Aggregate 
duration  in 
working- 
days  of  all 
_  disputes 
in  progress 

Building 

Coal  Mining  .  .  . 
Other  Mining  and 

Quarrying  .  .  . 
Engineering  and 

Shipbuilding  .  . 
Other  Metal      .    .    . 

Textile 

Clothing 

Transport  .... 
Other  Trades  .  .  . 
Local  Authority 

Services      .... 

63 
39 

5 

123 

46 
20 
22 
22 
80 

31 

30,000 
82,000 

1,000 

69,000 
42,000 
23,000 
5,000 
4,000 
23,000 

5,000 

249,000 
417,000 

13,000 

411,000 
211,000 
111,000 
74,000 
20,000 
160,000 

34,000 

58 

100 

10 

92 
65 
24 
27 
50 
110 

45 

8,000 
522,000 

2,000 

224,000 
38,000 
18,000 
11,000 
41,000 
31,000 

5,000 

91,000 
2,506,000 

28,000 

4,129,000 
256,000 
114,000 
102,000 
176,000 
323,000 

46,000 

Total      .... 

451 

285,000 

1,700,000 

581 

900,000 

7,771,000 

By  inspection  of  this  table,  one  sees  that  the  disputes 
were  not  much  greater  in  number  in  1919,  but  involved 
more  workpeople  and  a  much  greater  loss  in  workdays. 
The  division  by  groups  of  trades  shows  unmistakably  that 
the  two  storm  centers  of  British  industrial  life  at  the 
period  of  the  Commission's  visit  were  in  coal  mining  and 
the  engineering  and  shipbuilding  trades.  Most  of  these 
disputes,  too,  were  over  questions  of  wages. 

^  See  the  Labour  Gazette,  June,  1919,  p.  245. 

^  Labour  Gazette  and  official  publications  for  years  mentioned. 

85 


§  8.     Attitude  of  British  Employers  toward 
Unionism 

Group  attitude  on  any  subject  Is  a  composite;  it  is  not 
single  or  simple  in  character.  Inevitably,  too,  shades  of 
opinion  find  varying  expression.  An  organized  minority 
will  have  the  best  channels  of  communication.  On  such  a 
problem  as  trade  unionism,  it  is  the  undercurrent  of 
individual  opinion  that  is  most  significant.  The  employer 
in  his  office  does  not  "talk  for  publication";  his  is  the 
attitude  of  the  man  who  must  meet  from  day  to  day  the 
problems  of  management;  he  knows  the  "human  ele- 
ment" in  every  such  problem.  Your  Commission  lays 
most  stress,  therefore,  on  such  interviews.  But,  all  in  all, 
the  endeavor  has  been  to  get  the  essential  elements  in  the 
situation  and  to  give  them  due  weight. 

The  first  point  to  keep  in  mind  is  that  not  all  British 
labor  is  organized.  There  are,  perhaps,  about  five  and  a 
half  millions  of  workmen,  including  women,  who  are 
members  of  unions,  out  of  a  possible  fourteen  millions. 
This  leaves  a  fair  majority  outside  of  any  labor  organiza- 
tion. The  Whitley  Commission,  for  example,  found  it 
necessary  to  divide  British  labor  into  three  groups:  (1) 
workers  in  those  industries  in  which  organization  on  the 
part  of  employers  and  employees  is  sufficiently  developed 
to  render  their  respective  associations  representative  of 
the  great  majority  of  those  engaged  in  the  industry, 
(Group  A);  (2)  industries  in  which,  either  as  regards 
employers  or  employed,  or  both,  the  degree  of  organiza- 
tion, though  considerable,  is  less  marked  than  the  first 
group  (Group  B);  (3)  industries  in  which  organization  Is 
so  Imperfect,  either  as  regards  employers  or  employed,  or 
both,  that  no  associations  can  be  said  adequately  to  repre- 
sent those  engaged  in  the  industry  (Group  C).^ 

Furthermore,  about  one  half  of  the  total  number  of 
unionized  workmen  are  in  the  basic  trades,  coal  mining, 
shipbuilding,  engineering,  and  textiles.-  There  are  many 
British  employers,  therefore,  who  do  not  have  to  face  the 
problem  of  unionism,  who  have  had  no  experience  with  It, 
and  who  probably  have  only  an  instinctive  snap  judgment 
on  It.  There  are  others  who  have  long  had  this  problem 
before  them  and  who  have  faced  the  fact  of  a  labor  force 
unionized   upwards  of  95  per  cent  of  Its  total  possible 

'  Great  Britain.  Ministry  of  Reconstruction.  Committee  on  Relations  between 
F.mploycrs  and  Kmployed,  p.  7.     London,  1918. 
*  Ibid.,  p.  59. 

86 


strength.  Between  these  two  extremes  there  are  number- 
less gradations.  A  condition  of  this  kind  would  make 
almost  inevitably  for  a  wide  divergence  in  point  of  view. 
Herein  also  becomes  patent  the  error  in  speaking  of  British 
labor,  without  qualification,  as  if  it  were  wholly  organized. 
Nevertheless,  relative  to  France,  Italy,  and  the  United 
States,  British  labor  is  highly  organized. 

It  seems  to  your  Commission  fair  to  say  that  in  those 
industries  where  unionization  is  concentrated,  British 
employers  as  a  general  rule  are  facing  the  facts.  Those 
industries  have  gone  on,  are  still  going  concerns,  with 
organized  workmen.  A  modus  vivendi,  a  working  basis, 
more  or  less  satisfactory,  but  sufficient  to  get  on  with,  has 
been  developed.  This  is  indicated  not  only  by  the  fact 
that  business  has  gone  on,  but  also  by  the  fact  that  the 
union  rules  and  regulations,  the  "network  of  restrictions" 
had  to  be  accepted  by  the  management.  The  very 
difficulty  that  the  unions  have  had  in  establishing  this 
network,  the  very  reluctance  with  which  they  gave  them 
up  even  in  a  dire  emergency,  demonstrates  the  fact  that 
employers  did  not  welcome  them;  and,  since  the  primary 
motive  for  organization  of  unions  was  to  establish  them, 
it  follows  that  the  employers  did  not  welcome  the  unions. 

The  divergent  attitude  of  employers  appears  also  within 
the  group  of  industries  with  highly  organized  workers.  A 
representative  of  a  famous  engineering  firm  said  to  the 
Commission  that  he 

"very  strongly  advised  that  American  employers  keep  clear 
of  union  conditions  as  long  as  physically  possible.  We  do  not 
advise  collective  bargaining  [i.e.,  recognition  of  the  unionsl, 
because  it  is  a  constant  source  of  annoyance  and  many  petty 
matters  are  brought  in  which  otherwise  would  be  forgotten." 

The  general  superintendent  of  a  large  engineering  firm 

very  emphatically  urged  the  American  employers  to  keep 
away  from  collective  bargaining  or  any  other  moves  that 
would  facilitate  unionization.  If  employers  will  broaden 
their  attitude  toward  workers,  the  unions  will  find  trouble  in 
getting  members. 

Another  prominent  employer  declared: 

"Personally,  I  will  fight  the  workers'  pretensions.  I  will 
not  compromise;  any  manufacturer  who  compromises  is 
yielding  on  principles  vital  to  industry." 

87 


And  still  another  shade  of  opinion  was  expressed  by  an 
employer  who  said  that 

in  dealing  with  their  own  employees  they  had  been  able  to  get 
on  with  them  better  by  themselves  than  by  working  through 
larger  (labor)  organizations. 

Said  another: 

"The  employer  must  do  one  of  two  things;  either  put  his 
own  house  in  order  and  try  to  do  the  straight  thing  by  the 
laborer  so  that  unionism  is  not  necessary,  or  deliberately 
court  unionism.     Undoubtedly  the  first  method  is  better." 

Or  this  individualistic  attitude: 

Where  employers  prefer  to  deal  with  organized  labor  let 
them  go  their  own  gait,  but  the  right  thing  to  do  is  to  so 
handle  the  situation  that  the  necessity  for  unionization  shall 
not  exist. 

Another  manager  in  Lancashire  said: 

"The  present  methods  of  collective  bargaining  are  ab- 
solutely the  only  way  to  handle  the  relationships  between  em- 
ployers and  employees.  It  should  be  realized,  however,  that 
this  method  is  only  a  temporary  expedient,  to  be  followed 
only  until  a  more  correct  plan,  ethically,  can  be  developed." 

A  works  manager  in  the  same  locality 

was  heartily  in  accord  with  the  union  methods  of  handling 
the  relations  between  employers  and  employees. 

A  works  manager,  with  experience  of  both  American 
and  British  conditions,  remarked: 

Officers  of  employees'  organizations  can  influence  them 
better  than  if  such  organizations  did  not  exist.  I  was  strongly 
anti-union  before  coming  to  England,  but  my  experience  has 
convinced  me  that  control  of  labor  through  organizations  is 
the  right  way,  and  I  have  found  that  shop  organizations  can 
be  handled  more  successfully  by  the  works  managers  than  if 
they  were  not  organized. 

These  interviews  illustrate  the  various  shades  of  opinion 
held  by  individual  employers  in  the  industries  where  labor 
is  highly  organized.  They  show,  too,  how  difficult  it  is  to 
make  an  unqualified  statement  in  regard  to  them.  In- 
dividual attitudes  can  be  generalized  only  where  they  are 
known  to  represent  fairly  the  best  judgment  of  the  em- 


ployers  and  cover  all  conditions.  Your  Commission  states 
the  fact  that  practically  every  individual  employer  inter- 
viewed by  it  was  opposed  to  the  complete  unionization  of 
labor,  and  for  practical  reasons  to  be  stated  later  on. 

There  appears  to  be  a  decided  tendency  on  the  part  of 
employers'  associations,  both  in  the  interviews  with  your 
Commission  and  in  published  statements,  to  express  a 
friendly  attitude  towards  responsible  organizations  among 
workmen.  Thus,  the  secretary  of  one  of  the  most  im- 
portant industries  in  England  gave  the  following  testimony 
in  an  interview: 

The  secretary  spoke  cordially  of  the  relation  between  the 
federation  (of  employers)  and  the  trade  unions  in  that 
industry.  The  leaders  of  the  unions  were  in  general  able  to 
discipline  the  men.  In  this  respect,  the  constitutional  leaders 
of  the  unions  received  the  full  support  of  the  federation. 
When  any  union  broke  away  or  when  internal  trouble  arose, 
the  federation  refused  to  deal  with  any  disputes  resulting 
therefrom  until  the  union  leaders  had  sent  their  men  back 
to  work. 

The  secretary  of  another  employers'  federation  ex- 
pressed 

his  confidence  in  the  present  methods  of  collective  bargaining 
with  the  unions,  and  also  in  the  leaders  of  the  unions.  .  .  . 
He  stated  that  the  employers  are  well  satisfied  with  the  present 
plan  of  collective  bargaining. 

A  representative  of  a  textile  trade  employers'  association 
told  the  Commission  that 

Employers  and  employees  are  equally  well  organized  so  that 
the  industry  enjoys  the  advantage  of  having  a  strong  group 
on  each  side  to  represent  them.  .  .  .  The  labor  aspect  of  the 
industry  is  seen  in  the  harmonious  relations  with  employees. 

Some  employers'  associations,  such  as  the  Federation  of 
Lace  and  Embroidery  Employers'  Association,  Federation 
of  Master  Printers,  Midland  Master  Hosiery  Bleachers, 
Dyers,  and  Finishers'  Association,  have  incorporated 
under  the  law  as  trade  unions  in  order  to  take  advantage 
of  the  British  laws  favorable  to  such  organizations. 

Here  is  clearly  a  palliating,  conciliatory  attitude,  and 
it  is  in  marked  contrast  with  the  divergent  views  of 
individual  employers.  Apparently,  organized  employers 
want  to  put  themselves  on  record  as  being  just  and  rea- 
sonable   in    their    attitude    toward    labor   problems.      In 

89 


general,  too,  it  seems,  employers'  organizations  are  willing 
to  meet  with  responsible  labor  organizations.  Whether 
or  not  such  a  policy  has  received  unanimous  endorsement 
from  the  membership  is  another  question.  Most  likely 
there  are  diverse  opinions  within  employers'  organizations 
as  well  as  within  labor  unions.  It  is  an  authorized  policy, 
however,  and  has  not  been  challenged. 

The  attitude  of  the  British  Government,  as  expressed 
through  the  Industrial  Council  of  the  Board  of  Trade, 
1913,  composed  of  an  equal  number  of  employers  and  labor 
leaders,  through  the  government  proposal  of  the  Whitley 
Councils,  and  through  public  statements  by  the  Minister 
of  Labour,  has  clearly  been  friendly  toward  labor  organiza- 
tions. There  can  be  no  doubt  that  it  is  the  policy  of  the 
Government  to  seek  for  a  responsible,  organized  body 
among  workmen  with  which  to  deal.  In  this  attitude 
there  is  also  a  political  element,  as  will  be  shown  in  dis- 
cussing the  Whitley  Councils  and  the  Industrial  Con- 
ference. 

The  facts  given  in  the  preceding  discussion  demonstrate 
how  difficult  it  is  to  express  in  general  terms  the  British 
employers'  attitude  toward  unionism,  and  at  the  same 
time  give  due  weight  to  each  shade  of  opinion,  to  varying 
conditions,  and  to  diverse  motives.  It  is  a  situation  that 
changes  with  each  new  experience.  But  your  Commission 
has  endeavored,  to  the  height  of  its  ability,  to  select  the 
most  significant  and  representative  items  and  to  give  them 
a  just  evaluation. 

The  most  potent  influence  in  the  attitude  of  British 
employers  toward  labor  organizations  today  is  their  war 
experience.  In  all  our  interviews  we  were  impressed  by 
the  conviction  of  British  employers,  freely  spoken  and 
strongly  emphasized,  that  the  grave  situation  which 
has  now  arisen  between  employers  and  employees  is 
mainly  due  to  the  neglect  by  employers  for  years  past  of  a 
proper  interest  in  their  employees.  There  is  now  no 
question  as  to  their  being  awake  to  the  situation  and  as  to 
a  desire  to  correct  the  wrongs  of  the  past  in  a  fine  spirit  of 
humanitarianism  and  fair  play;  and  they  recognize  that 
their  workers  should  have  greater  opportunities  and 
better  conditions  of  life.  Many  of  them  are  conscien- 
tiously engaged  in  trying  to  find  the  means  to  bring  about 
this  end. 

It  must  be  stated  emphatically,  however,  by  your  Com- 
mission,   that    practically    all    the    individual    employers 

90 


interviewed  in  Great  Britain  strongly  advised  against 
complete  organization  of  employees  or  the  urging  of  any 
policy  which  would  lead  to  that  end.  They  did  not  favor  a 
development  of  labor  unionism,  because  of  the  practical 
difficulties  in  securing  a  conservative  attitude  of  mind 
among  labor  leaders.  They  would  welcome,  however,  and 
co-operate  with  a  moderate  and  conservative  unionism. 
As  Sir  Allan  Smith,  himself  an  employer,  said  to  the 
unionists,  at  the  first  meeting  of  the  Industrial  Conference, 
February  27,  1919: 

"You  are  under  an  absolute  misapprehension  as  to  the 
attitude  of  the  employers  in  the  present  state  of  difficulty 
and  unrest.  Many  of  the  employers  are  prepared  to  go  much 
further  in  the  amelioration  of  the  conditions  under  which  you 
work  than  some  of  you  have  any  idea  of." 

The  principle  of  organization  versus  organization 
seems  also  to  be  well  established.  Employers'  associa- 
tions, by  interviews  through  their  officials  and  by  state- 
ments through  the  press,  have  endorsed  the  program, 
in  certain  industries  at  least,  of  a  complete  organization 
on  both  sides,  by  employers  and  by  workmen.  A  large 
part  of  this  endorsement  is  undoubtedly  due  to  a  direct 
faith  in  the  ability  of  organizations  to  create  responsible 
parties  to  a  trade  agreement  and  to  the  practical  necessity, 
where  industries  and  work  groups  are  large,  of  dealing 
not  individually  but  through  group  representatives. 
A  part,  however,  is  due  to  the  exigency  that  arose  in  the 
Shop  Steward  Movement,  necessitating  the  choice  of 
the  less  of  two  evils.  This  is  explained  fully  in  the  chapter 
on  Shop  Stewards.^  Another  part  is  due  to  the  pressure 
of  Government  in  the  war  emergency,  where  it  was 
compelled  to  deal  with  employers  and  employees  in 
large  groups.  This  is  demonstrated  in  the  proposals 
for  the  Whitley  Councils  and  the  Industrial  Conferences, 
as  explained  later.-  It  is  an  opportunistic  acceptance, 
like  many  other  industrial  experiments,  and  not  a  calmly 
reasoned  and  accepted  policy. 

No  small  item  in  the  British  employer's  attitude  is 
his  stubborn  and  persistent  individualism.  There  is, 
on  the  one  side,  a  feeling  that  may  be  expressed  by  saying 
that  an  employer  believes  his  shop  is  his  castle  and  that 
he  has  an  inalienable  right  to  manage  it  as  he  wills.     It 


1  Cf.  pages  123-37. 

2Cf.  Chapters  XVI,  XVII. 


91 


is  his  problem,  and  he  may  be  relied  upon  to  handle 
it  with  firmness  and  justice.  In  so  far  as  this  feeling 
extends,  he  resents  all  encroachments  by  unions  or  by 
the  Government  upon  what  he  believes  to  be  his  preroga- 
tives. There  is,  on  the  other  side,  and  developing  from 
the  same  source,  the  feeling  that  once  the  rules  and 
regulations  of  trade  unions  have  been  established,  once 
involved  in  the  network  of  restrictions,  once  adjusted 
to  the  "harness,"  and  business  still  goes  on,  there  is  no 
need  to  change.  "Don't  stir  up  a  hornets'  nest."  Un- 
doubtedly, this  characterizes  a  goodly  number  of  British 
employers.  It  would  lead  them  to  say  that  such  a  situa- 
tion should  be  avoided,  if  possible,  but  once  involved  in 
it,  one  must  make  the  best  of  it;  it  might  become  worse. 

The  British  workman,  in  a  country  with  a  surplus  of 
labor,  has  his  haunting  fear  of  unemployment.  The 
British  employer,  in  an  industry  highly  unionized,  has 
his  haunting  fear  of  radicalism.  An  organization  that  is 
safe  in  the  hands  of  reasonable,  steady,  and  conservative 
leaders  becomes  a  menace  in  the  hands  of  irresponsible 
leaders.  The  Triple  Alliance  and  the  Miners'  Federation 
have  been  showing  the  reason  for  such  a  haunting  fear 
among  employers.  So  likewise  the  "rank  and  file" 
movement  and  the  "unauthorized  strike."  The  British 
employer,  generally  speaking,  is  loath  to  let  a  movement 
get  started  until  he  sees  where  it  may  lead  to.  He  states 
as  his  belief  that  the  great  mass  of  workmen  are  normally 
reasonable  and  conservative;  that  many  who  are  members 
of  unions  take  no  really  active  part;  that  at  the  final 
moment  of  definite  action,  if  not  before,  the  majority 
will  stop  to  ask  whither  they  are  going;  that  this  same 
group  will  respond  readily  to  a  fair,  courageous,  un- 
equivocal attitude  on  the  part  of  employers;  that  they 
are  not  Bolshevistic  unless  stampeded  by  the  wrong  kind 
of  leaders. 

Nevertheless,  he  has  this  ever  present  fear  that  radical 
leaders  may  dominate  the  unions  in  this  period  of  wide- 
spread unrest,  and  that  if  this  happens,  an  industrial 
catastrophe  is  inevitable.  The  British  employers  are 
just  beginning  to  sense  definitely  the  fact  that  socialistic 
preaching,  carried  on  with  persistence  from  the  "soap 
boxes,"  by  pamphlets  and  newspapers,  through  books 
and  periodicals,  has  seeped  into  the  thinking  of  many 
workmen,  and  that  the  cflFects  of  this  preaching  are 
to  be  seen  in  ihe  radical  attitude  of  trade  union  leaders 

92 


today.  Here  is  a  two-edged  sword.  The  agitators  need 
to  be  held  in  check,  to  be  disciplined  by  common  sense 
and  sober  judgment.  A  strong  organization  led  by  the 
right  kind  of  men  could  do  this.  But  organization  of 
workmen  gives  greatly  increased  power  for  evil  as  well 
as  good,  and  the  risk  of  this  organization  being  dominated 
by  radical  leaders  arises.  This,  too,  is  a  part  of  the 
British  attitude. 

The  real  issue,  however,  of  the  trade  union  problem 
in  the  mind  of  the  generic  British  employer  is  the  intro- 
duction of  an  outsider,  a  third  party,  to  act  as  a  repre- 
sentative of  his  own  workmen  in  the  matter  of  collective 
bargaining.  He  objects  to  governmental  interference 
in  the  management  of  his  business;  but  he  objects  much 
more,  and  on  principle,  to  a  union  representative  from 
outside  the  shop.  To  the  Government  and  to  the  outside 
union  representative  he  says:  Let  me  alone  so  that  I 
can  deal  with  my  own  workmen.  We  know  the  problem 
as  no  one  else  can  know  it.  It  is  mutually  ours.  We 
can  find  a  way  out. 


93 


CHAPTER  VI 
EMPLOYERS'    ORGANIZATIONS 

§  1.     Basis  of  the  Report 

During  Its  stay  in  Great  Britain,  the  Commission 
sought  to  obtain  information  about  the  nature  and 
extent  of  the  co-operation  which  exists  among  employers. 
Any  full  and  complete  study  of  the  situation  was  im- 
possible. The  subject  was  a  virgin  field  for  investigation, 
and  called  for  much  patient  inquiry.  The  number  of 
associations  in  existence  was  too  great  for  study  in  so 
short  a  space  of  time.  In  1914  they  were  reported  to 
amount  to  no  less  than  98  federations  or  associations 
national  in  scope,  with  1,460  local  associations.^  At  the 
date  of  our  inquiry  they  were  obviously  more  numerous, 
since  the  Federation  of  British  industries  alone  reported 
a  total  of  169  associations,  mostly  national  in  scope. '^ 

It  was  possible,  however,  for  brief  interviews  to  be 
held  with  the  secretaries  or  directors  of  several  of  the 
federations  or  national  associations  that  were  located 
in  London  or  in  one  or  two  provincial  towns.  In  all, 
twenty-four  interviews  of  this  nature  took  place.  In 
addition  documentary  material  was  sought,  but  In  few 
cases  did  this  give  a  living  picture  of  the  employers' 
associations  concerned.  Much  of  the  evidence  thus 
obtained  was  scattered  and  fragmentary.  Material  of 
this  order  was  secured  In  regard  to  thirty-seven  associa- 
tions In  all.  No  investigation  was  made  of  local  associa- 
tions. 

§  2.     Impulse  toward  Co-operation 

In  general,  the  impulse  toward  co-operation  has  lain 
in  the  sense  of  common  Interests.  Wherever  an  associa- 
tion or  federation  has  been  formed,  the  furtherance  of 
the  Interests  common  to  all  members  of  the  industry  or 
trade  has  been  given  as  Its  chief  impulse  and  aim. 

'  Seventeenth  Abstract  of  Labour  Statistics  of  the  United  Kingdom,  1915,  p. 
197.  Quoted  in:  British  Industrial  Experience  During  the  War.  Part  III. 
"Manufacturing  Industries,"  by  W.  Jctt  Lauck,  p.  930.  (Senate  Document 
114,  GOth  Congress,  First  Session.) 

*  See  page  64,  ante. 

94 


The  significance  of  this  obvious  principle  hes  in  the 
fact  that  co-operation  was  never  effective  until  this  sense 
of  common  Interests  was  aroused.  Such  recognition  was 
singularly  slow  in  asserting  itself  in  Great  Britain.  An 
excessive  Individualism  has  been  characteristic  of  British 
industry  in  the  past.  Employers  were  suspicious  of  their 
fellow  employers.  They  declined  to  share  ideas  with  them, 
fearing  that  by  doing  so  they  would  injure  their  own 
business. 

British  manufacturers  in  years  gone  by  were  extremely 
individualistic  and  would  not  co-operate  with  one  another  on 
any  subject  whatever. 

.  .  .  the  reason  why  federation  has  not  been  as  fully  adopted 
in  this  country  as  in  others.  I  think  it  is  principally  owing 
to  a  sense  of  exaggerated  individualism.^ 

This  attitude  of  suspicion  and  fear  was  often  discussed 
with  representatives  of  the  Commission  by  manufacturers 
who  were  familiar  with  the  United  States.  An  English 
cotton  manufacturer  told  how  he  had  years  ago  visited 
the  New  England  cotton  centers  under  the  guidance  of 
mill  managers  who  were  taken  into  the  mills  of  rival 
firms  and  shown  new  machinery  and  new  processes  without 
hesitation  or  fear.  Such  friendly  action  would  have  been 
impossible  at  that  time  in  Great  Britain. 

But  the  war  had  altered  this  spirit  of  mingled  fear, 
suspicion,  and  exaggerated  individualism.  A  common 
national  danger  and  a  common  opportunity  to  serve  the 
nation  impelled  employers  towards  co-operation.  Indus- 
tries, like  the  chemical  and  electrical,  found  that  German 
competition  in  pre-war  days  had  weakened  them  internally 
and  reduced  their  capacity  to  serve  the  nation  at  strategic 
industrial  points.  The  national  danger  was  a  stimulus 
and  Impulse,  while  the  added  wealth  and  efficiency  which 
resulted  from  removing  German  competition  and  over- 
coming the  handicap  it  had  imposed,  furnished  the 
material  basis  for  co-operation. 

Government  action  during  the  war  had  operated 
powerfully  to  compel  co-operation.  In  some  industries 
the  whole  supply  both  of  raw  materials  and  of  manu- 
factured products  was  brought  under  control.  Supplies 
of  such  products  as  leather,  wheat,  and  wool  were  limited 
and    their   distribution    strictly    regulated.      But   control 

^  See  Report  of  General  Aleeting  of  Federation  of  British  Industries,  October 
and  December,  1918. 

95 


went  even  farther.  When  the  output  of  a  factory  was 
requisitioned,  the  manufacturer  was  paid  the  cost  of 
production,  plus  a  reasonable  profit.  To  enable  this 
profit  to  be  calculated,  manufacturers  were  required 
to  furnish  information  as  to  output,  cost  of  production, 
and  profit  during  previous  years,  and  to  submit  to  a 
census  of  machinery,  labor  employed,  productive  capacity, 
and  supply  of  raw  material.  The  method  of  control, 
which  was  often  in  the  hands  of  civil  servants  quite 
unfamiliar  with  the  industry,  aroused  much  criticism 
from  manufacturers.  It  was  out  of  such  circumstances 
that  the  Wool  Textile  Association,  for  instance,  arose 
in  1917,  and  confronted  the  Central  Wool  Advisory 
Committee  set  up  by  the  War  Office  with  a  demand 
that  the  control  of  wool  should  be  taken  out  of  the  hands 
of  officials  and  placed  under  a  board  of  practical  men. 

The  extent  of  government  control  and  the  possibility 
of  its  continuance  after  the  war  have  stimulated  a  certain 
amount  of  association  in  self-defense.  This  motive  is 
seldom  avowed,  except  in  the  case  of  the  Imperial  Com- 
mercial Association,  founded  in  May,  1918.  This  asso- 
ciation gives  the  following  three  reasons  to  justify  its 
formation. 

(1)  Business  men  are  menaced  by  rapidly  growing  State 
Departments  (they  numbered  eighty,  January,  1919)  armed 
with  autocratic  powers  which  are  being  used  to  cut  down  and 
impair  a  commercial  system  which  is  the  outcome  of  centuries 
of  individual  effort  and  enterprise. 

(2)  Business  men  are  being  forced  to  disclose  their  methods 
of  business,  sources  of  supply,  and  customary  markets,  to 
their  detriment. 

(3)  The  state  as  a  trader  stands  self-condemned,  through 
inefficiency  and  gross  prodigality. 

While  this  association  is  more  largely  commercial  than 
industrial,  its  action  and  motives  reflect  the  attitude 
present  in  some  of  the  employers'  associations. 

Government  control,  however,  did  not  necessarily 
stimulate  the  motive  of  defense.  In  many  cases,  co- 
operation with  the  national  Government  was  a  more 
potent  motive  to  trade  association.  The  milling  trade, 
which  was  called  upon  to  handle  a  difficult  food  situation, 
was  converted  from  a  voluntary  trade  association  into  a 
federation  that  could  act  as  a  whole.     In  the  boot  and 

9G 


shoe  trade  a  similar  result  was  achieved.     Before  the  war 
this  trade  was  one  of  the  most  individualized. 

In  1914  it  had  no  common  standard  of  production,  no 
common  basis  of  costing;  it  had  not  established  any  definite 
principles  of  factory  management;  it  had  no  common  policy 
for  supplying  its  home  customers  or  for  developing  oversea 
markets. 

But  with  the  war  came  governmental  control  of  the 
supply  of  raw  leather  and  hides,  governmental  requisi- 
tioning of  all  products,  and  pressure  for  a  large  quantity 
of  durable  products  of  a  high  quality.  Response  to  this 
demand  compelled  the  best  firms  to  educate  inferior  firms 
in  efficiency. 

In  all  the  local  centers  costings  committees  met  and  pooled 
their  knowledge;  and  on  a  national  committee  the  leaders 
associated  and  shared  the  experience  of  their  own  district.  .  .  . 
The  trade  found  itself  able  to  consider  its  problems  with  a 
breadth  of  vision  and  a  courage  undreamed  of  in  the  days 
of  peace.    It  had  in  fact  become  a  federation. 

On  this  basis  of  practical  co-operation,  the  formation 
of  a  federation  of  these  local  associations  was  a  simple 
matter. 


§  3.     Demand  for  Representative  Bodies 

In  another  way,  the  pressure  of  the  war  tended  to  make 
association  among  employers  more  complete  and  exten- 
sive. The  Government  wished  to  have  representative 
bodies  with  which  to  deal  in  any  matter.  Such  centrali- 
zation made  administration  easier.  The  government 
department  dealt  with  a  body  representative  of  the  in- 
dustry, and  this  representative  body  made  the  wishes  of 
the  officials  known  throughout  the  industry.  Where  the 
industry  was  well  organized  previously,  the  effect  was  to 
increase  its  membership  almost  to  the  total.  Where  the 
industry  was  poorly  organized,  probably  because  of  its 
seasonal  characteristics,  as  in  the  building  trade,  the  effect 
was  to  increase  the  strength  of  the  organization.  Where 
the  industry  was  unorganized  previously,  it  was  urged 
into  organization,  sometimes  with  an  immense  measure 
of  success. 

The  reaction  from  this  pressure  towards  complete  or- 
ganization of  the  employers  in  an  industry  is  of  consider- 
able significance.     In  practically  no  industry  are  all  the 

97 


employers  included  in  the  national  federation  or  associa- 
tion. In  many,  the  percentage  is  over  90,  but  in  the 
Builders'  Federation,  for  example,  it  drops  as  low  as  50. 
The  employers  who  were  associated,  were  bound  by  gov- 
ernmental regulations,  particularly  in  respect  to  arbitra- 
tion awards  of  wages  and  hours.  While  in  many  of  these 
respects  the  non-associated  employers  were  subject  to  the 
same  law,  there  were  certain  disadvantages  to  which  the 
latter  were  not  subject  that  led  the  associated  employers 
to  demand  that  association  should  be  made  compulsory. 
In  fact,  it  had  become  customary  for  awards  concerning 
wages  to  be  extended  to  all  members  of  an  industry, 
whether  or  not  in  the  association  which  had  taken  action 
in  the  matter.  Thus  while  association  had  not  been  made 
compulsory,  it  was  practically  so.  Individuals,  finding 
that  their  refusal  to  join  the  association  in  their  industry 
did  not  absolve  them  from  the  awards  of  arbitration 
tribunals,  held  out  no  longer. 

§  4.     Method  of  Association 

Another  factor  led  to  a  strengthening  of  the  impulse 
towards  the  formation  of  employers'  associations.  The 
war  had  been  accompanied  by  a  growth  in  trade  union 
organization.  This  produced  a  twofold  reaction  on  the 
part  of  employers.  Some,  in  self-defense,  sought  to 
increase  the  strength  of  their  organizations  so  as  at  least 
to  parallel  that  of  the  trade  unions.  This  motive  operated 
particularly  in  industries  that  were  badly  organized,  and 
which  employed  a  large  number  of  general  laborers,  one 
of  the  occupational  groups  in  which  unionization  increased 
greatly  during  the  war.  Contemporaneously  with  this 
increase  in  union  strength  and  a  consequent  quickening 
of  the  motive  of  self-defense  came  a  widespread  move- 
ment in  the  direction  of  securing  more  harmonious  in- 
dustrial relations.  The  publication  of  the  report  of  the 
Commission  of  Inquiry  into  Industrial  Unrest'  and  of 
the  Whitley  Report,"  coupled  with  a  desire  to  assist  in 
raising  the  employees'  standard  of  life,  co-operated  to 
bring  about  certain  associations  for  the  definite  purpose 
of  establishing  amicable  arrangements  and  relations  be- 
tween employers  and  employed,  and  of  avoiding  and 
settling  strikes  and   industrial  warfare.      The  Federation 

*  Reprinted  by  U.  S.  Bureau  of  Labor  Statlslics,  Bulletin  237. 

*  Reprinted  by  U.  S.  Shipping  Board. 

98 


of  British  Industries,  established  in  1916,  put  this  pur- 
pose foremost  among  its  aims  and  co-operated  in  the 
establishment  of  the  National  Alliance  of  Employers  and 
Employed,  whose  first  object  is 

to  promote  active  co-operation  of  employers  and  employed 
in  the  treatment  of  questions  generally  affecting  labor  and 
employment  in  all  trades  and  industrial  occupations. 

Six  Other  important  manufacturers'  associations  formed 
during  the  war  have  either  definitely  stated  such  a  pur- 
pose or  have  formed  a  subsidiary  association  to  deal  with 
labor  matters. 

The  organization  of  employers'  associations  under  the 
stimuli  just  described  has  taken  a  twofold  direction.  In 
the  first  place,  individual  employers  and  firms  who  had 
formerly  stood  apart  from  their  fellows,  joined  some  local 
association  of  their  own  industry  or,  where  regulations 
permitted,  became  members  of  a  national  association  or 
federation.  This  process  was  one  of  the  enrollment  of 
individual  firms  in  associations.  The  second  direction 
that  the  process  took  was  that  of  the  federation  of  local 
associations  into  national  associations  within  the  same 
industry.  This  completed  the  process  of  centralized 
representation.  Simultaneously,  there  was  a  process  in 
which  the  two  tendencies  were  united,  namely,  the  crea- 
tion of  a  super-federation  covering  all  industries  in  which 
national  associations  could  themselves  be  members.  This 
super-federation  was  the  Federation  of  British  Industries. 

A  schematic  representation  of  this  form  of  association 
would  show  individual  firms  joining  their  local  associa- 
tions, and  the  latter  federating  Into  national  associations, 
and  the  national  associations  joining  the  Federation  of 
British  Industries.     (See  Type  1.) 

But  as  was  consonant  with  the  British  love  of  local 
autonomy  and  of  Individual  action,  the  actual  processes 
of  organization  had  none  of  this  rigid  uniformity.  Indi- 
vidual firms  do  not  always  join  a  local  association  in  then- 
own  industry.  They  sometimes  help  to  form  local  federa- 
tions of  employers  In  various  industries  (Type  2),  or  them- 
selves subscribe  to  the  Federation  of  British  Industries, 
which  receives  individual  firms  as  members  (Type  3). 
Further,  local  associations  in  an  industry  do  not  always 
federate  Into  a  national  association.  Sometimes,  by 
reason  of  the  localized  nature  of  British  Industry,  the  local 

99 


association  covers  the  whole  industry  or  the  whole  of  the 
competitors  within  a  section  of  the  industry,  and  thus  is 
equivalent  to  a  national  association.  Again,  the  em- 
ployers in  an  industry  may  be  so  scattered  that  a  local 
association  is  not  possible,  and  a  national  organization  is 
the  only  possible  form  (Type  4).  In  addition,  there  are 
a  number  of  national  associations,  regularly  formed  of 
local  associations,  which  are  not  themselves  members  of 
the  Federation  of  British  Industries  (Type  5). 

Of  29  associations  concerning  which  information  was 
obtainable,  9  belonged  to  Type  1,  6  to  Type  2,  12  to  Type 
4,  and  2  to  Type  5.  Type  3,  which  did  not  pertain  to  asso- 
ciations, was  not  represented  at  all,  though  it  should  be 
noted  that  the  membership  of  such  national  associations 
as  the  Federation  of  British  Industries  and  the  Imperial 
Commercial  Association  was  composed  largely  of  this 
type.  The  9  associations  scheduled  as  belonging  to  the 
first  type  are  among  the  oldest  and  most  powerful  em- 
ployers' federations  in  Great  Britain.  They  had  been 
fully  organized  into  local  and  national  associations  before 
the  formation  of  the  super-federation.  On  the  other  hand, 
of  the  associations  included  under  Type  4,  which  is  diifer- 
entiated  from  Type  1  by  the  absence  of  local  associations, 
several  were  new,  while  others  were  associations  that  could 
not  be  localized. 

Within  these  various  types  of  associations  there  is  a 
conflict  between  centralization  and  decentralization  of 
control.  Some  federations  have  iron-clad  rules  enabling 
them  to  control  not  only  the  local  associations  that  com- 
prise their  membership,  but  also  the  individual  firms  that 
belong  to  the  local  associations.  Nevertheless,  manu- 
facturers show  a  decided  preference  for  local  autonomy. 
Their  motto  is  "centralization  for  policy  but  decentraliza- 
tion for  administration." 

§  5.     Federation  of  British  Industries 

At  the  apex  of  the  pyramid  of  organization  stands  the 
Federation  of  British  Industries.  This  body,  which  came 
into  existence  in  1916  at  the  suggestion  of  Mr.  Dudley 
Docker,  afterwards  its  first  president,  is  a  federation  of 
the  trade  associations  of  every  important  industry  in  the 
United  Kingdom.  In  March,  1919,  its  membership  com- 
prised 172  trade  associations,  15  associations  of  controlled 
establishments,  and  S99  individual  firms.     Its  total  mcm- 

100 


bership  was  at  that  time  1,086  in  number,  each  of  whom 
paid  an  annual  subscription  of  £100  ($486),  giving  the 
Federation  an  annual  income  of  over  half  a  million  dollars. 
Its  membership  was  estimated  in  October,  1918,  to  repre- 
sent some  17,000  firms,  twenty  billion  dollars'  worth  of 
capital,  and  four  million  employees. 

The  membership  of  the  Federation  is  based  on  two 
principles.  Firms  and  associations  must  be  bona  fide 
British  firms  engaged  in  production,  preferably  with  an 
export  trade.  On  the  other  hand,  however,  the  Federa- 
tion cannot  be  compared  to  a  trust  or  combine,  since  its 
members  have  come  together  for  the  good  of  industry  as 
a  national  factor,  not  for  the  purpose  of  buying  and  selling 
the  goods  specific  to  each  industry.  It  is  an  employers' 
parliament,  not  a  combine  or  cartel. 

Among  its  aims  and  objects  is  an  article  sketching  the 
purpose  and  form  of  the  Federation.  It  is  said  to  have 
been  organized  to  promote,  encourage,  and  where  neces- 
sary form,  effective  representative  associations  in  each 
industry  and  trade,  and  to  collect  these  associations  into  a 
central  federation  for  dealing  with  matters  of  common 
interest  and  for  mutual  support.  This  central  Federation 
was  to  be  organized  in  such  a  way  as  to  enable  each  in- 
dustry or  trade  to  express  its  views  through  a  self-selected 
channel,  and  British  industry  as  a  whole  to  be  represented 
adequately  in  negotiations  with  the  Government  or  any 
other  representative  body. 

On  the  other  hand,  the  Federation  does  not  intervene 
in  any  way  in  the  internal  affairs  of  an  industry,  nor  con- 
cern itself  with  regulating  prices,  wages,  or  conditions  of 
employment  unless  requested  to  do  so  by  the  association 
representative  of  the  industry  concerned.  The  Federa- 
tion as  a  whole  advocates  no  particular  economic,  political, 
or  social  program,  restricting  itself  to  ascertaining  and 
expressing  the  views  of  its  members.  It  thus  explicitly 
restricts  itself  to  the  general  interests  of  industry. 

The  organization  is  placed  on  a  representative  and  self- 
governing  basis.  The  members  have  divided  themselves 
into  seventeen  main  industrial  groups.  Each  group  has 
divided  the  industry  it  represents  into  subgroups  which 
represent  the  various  trades  within  the  industry.  In 
cases  where  the  trade  contains  several  important  and 
diverse  branches,  it  is  further  subdivided  into  sections. 
Each  group  and  subgroup  and  section  has  its  own  standing 
committee  elected  by  the  members  in  each  subdivision. 

101 


A  further  division  is  made  geographically.  Sixteen 
districts  have  been  allocated,  each  with  its  own  standing 
committee  and  district  or  organizing  secretary.  This 
committee  deals  with  local  matters  and  advises  the 
Federation  on  such  questions  of  general  interest  as  can, 
from  their  nature,  be  dealt  with  more  effectively  on  a  local 
than  on  a  trade  basis.  This  same  district  organization 
is  repeated  in  the  case  of  the  controlled  establishments. 
By  this  means  the  principle  of  decentralized  administra- 
tion is  given  the  fullest  possible  scope. 

The  government  of  the  Federation  is  in  the  hands  of  a 
Grand  Council  which  is  elected  by  the  groups,  each  group 
choosing  a  number  of  councilors  proportionate  to  its  size 
and  importance,  as  measured  by  the  number  of  work- 
people on  the  payroll  of  its  members.  An  association 
may  choose  one  representative  for  every  20,000  employees 
or  part  thereof  engaged  by  the  members  in  a  sub-group. 
Individual  firms  are  represented  on  the  basis  of  one  repre- 
sentative for  every  40,000  employees  or  part  thereof 
(over  2,000)  engaged  by  the  individual  members  in  a  sub- 
group. Each  federation  district  and  each  association  of 
controlled  firms  has  also  one  representative  on  the  Grand 
Council. 

This  basis  of  representation  results  in  a  very  large  mem- 
bership for  the  Grand  Council,  which  had  nearly  280 
members  in  March,  1919.  The  Council  meets  monthly 
for  the  discussion  of  questions  of  policy  that  concern  the 
whole  of  British  industry.  It  is  obviously  more  of  the 
nature  of  a  representative  Parliament  than  an  executive 
council.  It  is  too  large  and  unwieldy  for  the  latter  pur- 
pose; hence  a  smaller  body,  corresponding  to  a  cabinet, 
has  been  set  up,  to  meet  weekly  for  carrying  on  the  admin- 
istration swiftly  and  efficiently.  This  central  executive 
is  chosen  by  the  representatives  of  the  groups,  organized 
as  electoral  colleges,  allotting  one  representative  for  every 
100,000  persons  in  the  employment  of  the  members  of 
the  group.  In  addition,  the  combined  associations  of 
controlled  firms  are  allowed  to  elect  not  less  than  two 
representatives.  The  result  is  a  central  executive  of 
fifty-five  members  which,  while  large,  is  reduced  to  a 
workable  size  by  the  large  proportion  of  absentees  at 
each  meeting.  Members  living  in  distant  parts  of  Eng- 
land arc  unable,  in  many  instances,  to  attend  a  weekly 
meeting  in  London.  In  consequence,  seven  members  of 
the  executive  committee  constitute  a  quorum. 

102 


This  account  of  the  organization  of  the  Federation  of 
British  Industries  reveals  it  as  a  representative  body  so 
constructed  as  to  be  unable  to  do  anything  other  than 
speak  in  the  name  of  all  industry.  So  carefully  are 
various  interests  balanced,  so  wide  a  diversity  of  political 
and  fiscal  opinions  are  there  represented,  that  sectional 
or  partisan  action  is  at  least  difficult.  In  an  official 
account^  the  results  sought  to  be  achieved  by  the  elabo- 
rate system  of  representation  above  described  are  thus 
set   forth : 

It  [the  Federation]  cannot  be  pledged  to  advocate  any 
particular  economic,  political,  or  social  program,  but 
only  to  examine  such  programs  from  the  point  of  view  of 
the  well-being  of  British  industry  as  a  whole.  Nor  can  its 
machinery  become  subservient  to  any  particular  interest. 

The  wide  diversity  of  interests  and  political  views  repre- 
sented within  an  organization  so  large,  is  in  itself  a  guarantee 
that  any  decisions  arrived  at  on  such  matters  will  be  national 
in  the  truest  sense. 


§  6.     Other  Associations 

The  majority  of  federations  and  national  sasociations 
other  than  the  Federation  of  British  Industries  are  based 
on  local  associations.  They  represent  a  grouping  of  local 
associations  in  the  same  industry  with  the  specific  object 
of  dealing  with  industrial  conditions  common  to  that 
industry. 

The  basis  of  the  representation  of  the  local  association 
on  the  national  federation  is  of  a  threefold  order. 

(1)  The  simplest  and  most  common  is  that  the  number 
of  employees  determines  the  number  of  representatives 
each  local  association  may  send.  In  making  provision 
for  the  enforcement  of  this  article  an  arbitrary  quantum 
has  to  be  stated  with  a  margin  large  enough  to  give  an 
undue  representation  to  smaller  associations.  Thus 
the  Federation  of  British  Industries,  as  shown  above, 
allows  one  representative  for  every  40,000  or  part  thereof 
over  2,000.  On  this  basis  it  is  obvious  that  equal  repre- 
sentation would  be  granted  to  firms  or  associations  with 
4,000,  8,000,  25,000,  or  any  other  number  of  employees 
up  to  and  including  40,000. 

1  Bulletin  of  the  Federation  of  British  Industries,  Lyons  Fair  edition,  March, 
1919. 

103 


(2)  This  objection  has  led  two  of  the  more  highly 
organized  federations  to  base  representation  on  the 
wages  bill.  In  one  of  these  federations  the  representation 
of  the  local  federations  is  adjusted  annually  on  the  basis 
of  the  percentage  which  the  local  association's  wages 
bill  for  the  last  financial  year  bears  to  the  total  wages 
bill  of  the  whole  federation.  One  representative  is  allowed 
for  each  4  per  cent  or  part  thereof.  In  the  other  federation, 
the  system  is  the  same  except  that  the  local  association's 
wages  bill  is  calculated  on  the  basis  of  the  three  preceding 
years,  and  one  representative  is  appointed  for  each  3 
per  cent  or  part  thereof,  which  the  association's  wages 
bill  bears  to  that  of  the  federation. 

(3)  One  or  two  other  associations  base  representation 
upon  the  contribution  made  by  each  association  to  the 
funds  of  the  central  federation.  This  is  especially  true  in 
the  cotton  industry,  where  contributions  are  based  on 
a  payment  per  loom  or  per  spindle.  It  is  interesting  to 
observe  that,  in  this  case,  the  central  committee  of  the 
federation  can  levy  upon  the  local  associations. 

Not  all  federations  are  composed  of  local  associations 
pure  and  simple.  Some  include  single  firms,  in  the  same 
way  as  the  Federation  of  British  Industries.  This  is 
particularly  true  of  the  clay  industry,  which  is  very 
diversified  and  comprises  individual  firms  situated  in 
parts  where  there  is  no  opportunity  for  the  forming  or 
joining  of  local  associations.  The  problems  of  such 
firms  are  special  and  local,  but  on  larger  questions  of 
policy  the  national  federation  is  their  safeguard.  In 
this  federation,  the  system  of  trade  sections,  described 
below,  is  adopted  as  well  as  that  of  local  associations. 
Two  federations,  one  recently  formed,  the  other  twenty 
years  old,  include  distributers,  both  individuals  and  firms, 
among  their  members.  In  the  type  of  federation  described 
as  Type  4,  local  associations,  except  as  representative 
of  the  whole  industry,  and,  therefore,  national  in  scope, 
do  not  exist. 

In  these  federations  the  members  arc  divided  into  trade 
sections,  according  to  the  characteristic  articles  they  pro- 
duce. Thus,  the  clay  industries  are  divided  into  fifteen 
trade  sections,  the  chemical  industry  into  twelve,  the 
electrical  into  nineteen  or  twenty,  the  silk  into  five,  and 
so  on.  These  sections  have  the  same  functions  and  powers 
as  local  associations  and  the  same  independence. 

104 


The  relation  between  these  sections  and  the  national 
federation  is  in  each  case  a  combination  of  local  autonomy 
with  executive  oversight.  The  sections  discuss  their  own 
specific  problems,  but  are  linked  together  by  the  executive 
council  of  the  national  federation.  In  some  cases  the 
members  of  the  executive  are  the  officers  of  the  sections. 
In  other  cases,  where  the  connection  is  not  so  definite, 
the  general  secretary  sits  on  each  section,  thus  precluding 
it  from  breaking  away  in  policy  or  action  from  the  execu- 
tive. In  another  federation,  the  General  Council  reviews 
and  criticises  the  policy  and  actions  of  each  section  and 
ofi^ers  suggestions  for  its  guidance. 

Local  associations  are  comprised  of  individual  firms 
which  have  co-operated  for  the  treatment  of  problems 
peculiar  to  a  locality  or  to  the  industry  within  that 
locality.  In  most  cases  they  cover  a  large  proportion 
of  the  establishments  within  the  locality.  Their  structure 
is  simple.  Where  the  association  is  large  and  wealthy, 
it  has  a  full-time  secretary.  Committees  are  appointed 
for  specific  functions,  though  often  the  whole  work  is 
carried  on  by  the  Secretary  and  the  Executive  Committee. 
Delegates  are  appointed  to  represent  the  local  associations 
on  the  district  and  national  associations  in  which  they 
elect  to  enroll  themselves  as  members. 


§  7.     Control  over  Members 

The  regulations  of  federations  and  associations  diflFer 
greatly  in  respect  to  the  control  exercised  over  members. 
Almost  all  contain  a  provision  for  withdrawal  of  member- 
ship, but  owing  to  the  nature  of  the  association,  this 
withdrawal  is  purely  voluntary.  Many  other  associa- 
tions provide  for  fines  and  expulsion.  Several  federa- 
tions require  the  local  associations  affiliated  with  them  to 
make  provision  for  the  expulsion  of  any  one  of  their 
individual  members  by  the  general  meeting  of  the  feder- 
ated association.  At  the  same  time,  the  latter  has  a 
provision  for  the  expulsion  of  any  of  the  local  associations 
forming  its  membership,  provided  only  that  such  expul- 
sion is  endorsed  by  a  two-thirds  majority  in  a  referendum 
of  the  remaining  federated  associations.  These  same 
associations  require  that  no  step  of  general  importance 
should  be  taken  by  a  local  association  without  consulting 
the  Executive  Board  of  the  national  federation. 

105 


There  was  a  feeling  on  the  part  of  some  federations 
that  strict  control  of  the  membership  was  a  corollary  of 
the  prevailing  industrial  situation.  This  was  especially 
manifest  in  the  engineering  federations  where  the  strength 
of  labor  organizations  was  a  challenge  to  employers.  In 
an  interview,  the  secretary  of  one  of  these  declared: 

Only  by  disciplining  every  employer  within  the  industry 
and  compelling  him  to  follow  the  general  labor  policy  of  the 
employers  within  that  industry  could  the  employers  hold  their 
own  against  such  militant  unions  as  they  had  to  contend  with. 

The  secretaries  of  seven  federations  declared  their 
support  of  the  principle  that  employers  should  all  be 
compelled  to  enroll  in  the  association  representative  of 
their  trade.  This  principle  was  also  endorsed  for  reasons 
of  governmental  action  by  Sir  Robert  Home,  Minister 
of  Labour,  in  the  formula:  "Every  employer  in  his  asso- 
ciation; every  worker  in  his  trade  union." 

While  such  a  co-ordination  and  centralization  has  the 
support  of  powerful  factors  in  English  industrial  life, 
the  aversion  to  centralization  and  the  love  of  local  and 
individual  autonomy  will  probably  cause  the  structure 
above  outlined,  in  various  types,  to  remain  the  utmost 
achievement  of  organization  of  employers. 


§  8.     Functions  of  Employers'  Associations 

Indealing  with  the  functions  of  employers'  associations, 
a  distinction  must  be  observed  between  those  which  are 
purely  trade  associations  and  those  whose  primary  pur- 
pose is  the  handling  of  labor  questions.  While  these  two 
functions  are  not  invariably  separated,  there  is  a  growing 
tendency  in  that  direction.  Some  federations,  such  as 
the  Engineering  and  National  Employers'  Federation, 
have  always  dealt  with  labor  questions.  The  Shipbuild- 
ing Employers'  Federation  deals  almost  exclusively  with 
such  questions.  The  Employers'  National  Council  for 
the  Clay  Industries  was  formed  to  work  out  the  principles 
of  the  Wliitley  Report.  But  several  of  the  new  associa- 
tions had  separated  the  treatment  of  trade  and  labor 
questions,  sometimes  going  to  the  extent  of  setting  up  a 
separate  organization.  Thus,  the  Federation  of  British 
Industries,  in  order  to  carry  out  its  second  object, 

106 


the  promotion  and  encouragement  of  free  and  unrestricted 
communication  and  discussion  between  masters  and  workmen 
with  a  view  to  the  establishment  of  amicable  arrangements 
and  relations  between  masters  and  workmen  and  to  the 
avoidance  and  settlement  of  strikes  and  all  other  forms  of 
industrial  warfare  between  masters  and  workmen, 

had  assisted  greatly  in  setting  up  the  National  Alliance  of 
Employers  and  Employed,  for  the  treatment  of  labor 
questions.  The  chemical  and  light  leather  industries 
had  similarly  set  up  separate  organizations  for  the  same 
purpose.  Two  other  federations  which  had  arisen  during 
the  war  were  able  to  refer  their  labor  troubles  to  the  En- 
gineering and  National  Employers'  Association,  of  which 
they  were  members. 

The  functions  of  trade  associations  are  many  and  diverse. 
A  summarized  statement  of  the  chief  among  those  of  the 
Federation  of  British  Industries  will  serve  as  a  guide  to 
what  is  to  be  found  in  the  case  of  other  federations.  The 
first  object  is  the  organization  of  itself  as  a  federation. 
The  second  has  been  quoted  above. ^  The  chief  of  the 
long  list  of  those  remaining  are: 

(i)  Promote  the  interests  of  manufacturers,  assist  the  or- 
ganization of  industries  and  particularly  the  develop- 
ment of  industries  of  all  kinds. 

(ii)  Promote  and  develop  schemes  to  establish  and 
maintain  communication  between  manufacturers  and 
customers  desirous  of  purchasing  their  goods. 

(iii)  Afford  facilities  for  communicating  and  interchanging 
views  between  manufacturers  and  government  depart- 
ments so  that  the  latter  may  be  fully  seized  of  the 
views  of  such  manufacturers  on  matters  affecting  the 
industries  in  which  they  are  engaged. 

(iv)     Watch  over  legislation  and  the  administration  of  laws. 

(v)  Provide  legal  aid  for  members  in  such  matters  as 
patents  and  trade-marks,  and  where  the  interests  of 
the  P'ederation  are  involved. 

(vi)  Collect  and  circulate  statistics  and  information  on 
matters  connected  with  or  affecting  industry,  science, 
and  commerce. 

(vii)  Provide  a  central  medium  of  useful  and  confidential 
information  and  advice. 

'  See  page  100,  §  5. 

107 


(vili)  Promote  and  encourage  scientific  research,  improve 
technical,  scientific,  and  general  knowledge  of  manu- 
facturers, and  take  educational  measures  for  these 
purposes. 

(ix)  Circulate  information  as  to  nature  and  merits  of 
inventions  and  assist  and  encourage  the  exercise  of 
inventive  skill. 

(x)  Employ  travelers  to  promote  the  interests  of  British 
manufacturers  and  producers  and  obtain  information 
likely  to  be  of  use  to  them. 

These  general  purposes  are  found  duplicated  in  most 
other  associations.  The  promotion  of  the  interest  com- 
mon to  manufacturers  in  that  industrj^  forms  the  main 
object  of  most  federations  and  associations.  To  repre- 
sent the  industry  in  all  questions  arising  out  of  govern- 
mental action  is  especially  to  be  found  among  the  func- 
tions of  those  associations  created  during  the  war.  To 
watch  over  legislation,  while  not  figuring  largely  in  the  list 
of  functions,  is  only  absent  because  achieved  without 
overt  action  by  the  federation  itself. 

Quite  a  number  of  associations  are  ready  to  give  pecu- 
niary aid  or  legal  advice  to  their  members  or  indemnify 
them  when  action  in  accordance  with  the  policy  of  the 
association  has  caused  them  loss.  Several  associations 
are  publishing  statistics  and  collecting  confidential  in- 
formation that  may  be  of  service  to  the  industry. 

It  is  significant  that  no  object  occurs  so  frequently 
in  the  list  of  aims  as  that  of  the  promotion  and  encourage- 
ment of  scientific  research  and  of  technical  education. 
Industries  like  the  silk,  lace  embroidery,  clay,  boot  and 
shoe,  rubber,  chemical,  electrical,  and  engineering  are 
among  those  which  are  seeking  to  improve  technical 
processes  and  further  the  technical  efficiency  of  both 
employers  and  employed.  The  printing  industry,  and, 
in  part,  that  of  lace  embroidery,  have  taken  up  systems 
of  scientific  cost  accounts  and  appraisement. 

In  some  cases  there  was  a  preference  shown  for  some 
form  of  protective  tariff  within  the  near  future,  but  action 
along  such  lines  was  not  found  among  the  objects  of  any 
association. 

Some  of  the  associations  arc  registered  as  companies, 
but  few  of  them  so  openly  avow  their  purpose  to  promote 
trade  and  commerce  as  docs  the  Federation  of  British 

108 


Industries.  It  should  be  observed,  however,  that  the 
latter  is  concerned,  so  far  as  it  undertakes  the  object,  with 
the  furthering  of  trade  in  general,  especially  oversea  trade. 
At  its  annual  general  meeting,  October  31,  1918,  it  passed 
the  following  resolution  on  domestic  trade: 

That  with  a  view  to  consolidating  the  industries  of  this 
country  and  reducingspeculative  fluctuations  in  prices,  mem- 
bers of  the  Federation  of  British  Industries  are  recommended 
as  far  as  possible  to  draw  their  requirements  of  manufactured 
products  from  members  of  the  Federation. 

In  reality,  however,  as  the  chairman's  remarks  indicate, 
it  was  intended  to  weld  together  British  industry  and 
give  "a  real  preference  to  British  trade  in  British  mar- 
kets." The  commercial  aspect  of  the  activities  of  the 
Federation,  however,  is  centered  on  developing  foreign 
trade  so  as  to  oust  Germany  from  world  markets.  An 
Overseas  Trade  Committee  was  appointed  which  first 
sought  to  press  the  Government  to  take  action  to  represent 
British  commerce  in  foreign  countries.  As  a  result  of  this 
pressure  the  Government  accepted  the  principle  of  com- 
mercial attaches.  Further  action  by  the  Federation  was 
hindered  by  the  refusal  to  set  up  an  organization  which 
would  be  in  any  way  concerned  with  negotiating  business. 
At  length,  however,  a  proposal  was  made  that  commis- 
sioners or  representatives  of  the  Federation  should  be 
appointed  in  foreign  centers  of  trade.  These  men  were 
to  inform  manufacturers  generally  through  the  Federa- 
tion, of  the  industrial,  political,  and  social  conditions  of 
the  countries  they  were  in;  and  generally  to  foster  British 
industrial  and  financial  interests. 

While  no  other  federation  openly  aims  at  developing 
trade,  several  do  give  attention  to  foreign  trade,  and 
more  of  them  achieve  some  form  of  price-fixing.  One 
association  states  its  objects  thus: 

In  order  to  avoid  in  future  the  selling  below  cost  price,  the 
selling   ot  [goods]  of  too  slack  qualities,  the  piracy  of  .  .  . 
designs  and  patterns,  the  diversion  of  orders  from  their  proper 
owners  .  .  .  the  objects  of  the  association  shall  be  .  . 

(a)  To   fix  a  minimum  cost  price.   .  .  . 

(b)  To  regulate  qualities  and  fix  standards  of  goods.  . 

This  association  imposes  a  fine  of  £50  ($24,3)  for  under- 
selling, for  discounts  or  dishonest  bookkeeping.  Another 
association,  which  imposes  a  similar  fine  for  breach  of  its 

109 


rules,  aims  "to  prevent  unfair  competition  among  mem- 
bers of  the  association  and  the  cutting  of  prices,  and  unfair 
attempts  to  get  work  for  themselves  from  the  customers 
of  other  members."  It  regulates  prices  at  which  work 
shall  be  executed  by  members,  provides  that  no  member 
shall  carry  out  contracts  at  lower  prices  than  the  mini- 
mum fixed,  and  requires  all  members  to  advance  prices 
at  once  on  the  fixing  of  the  minimum.  Another  association 
which  seeks  to  obtain  a  "fair  market  price"  ("no  artificial 
inflation  of  prices  is  contemplated")  for  its  product  has 
a  selling  committee  to  fix  a  minimum  price  and  settle 
export  selling  terms  and  forms  of  contract.  The  whole 
of  the  product  made  for  export  is  placed  in  the  hands  of 
this  selling  committee. 

Most  employers'  associations  that  are  not  registered 
as  companies,  devote  attention  to  labor  matters.  While 
there  are  some  that  are  exclusively  devoted  to  the  treat- 
ment of  such  questions,  there  are  few  that  do  not  give 
them  a  large  place  in  their  functions.  In  fact,  many  of 
these  employers'  associations  are  registered  as  trade 
unions,  thus  acquiring  a  legal  status  as  an  association 
regulating  the  "relations  between  workmen  and  masters, 
or  between  workmen  and  workmen,  or  between  masters 
and  masters,  or  the  imposing  of  restrictive  conditions  on 
the  conduct  of  any  trade  or  business." 

Many  of  these  associations  include  among  their  objects 
the  regulation  of  wages  and  hours  and  the  settlement  of 
disputes.  These  objects  are  achieved  by  negotiations 
between  the  district  and  national  executives  of  employers' 
and  workers'  organizations.  But  the  most  frequently 
occurring  object  in  relation  to  labor  is  the  establishment 
of  machinery  for  promoting  amicable  arrangements  and 
relations  between  employers  and  workers.  This  object 
is  achieved  in  various  ways.  The  Federation  of  British 
Industries  has  set  up  the  National  Alliance  of  Employers 
and  Employed  as  an  organization  for  establishing  indus- 
trial harmony.  Two  other  associations  have  in  a  similar 
way  set  up  separate  organizations  to  deal  with  labor 
problems.  Fourteen  associations  have  established  Joint 
Standing  Industrial  Councils  on  the  Whitley  Plan.  The 
principle  of  conciliation  is  adopted  in  three  industries, 
shipbuilding,  engineering,  and  cotton,  by  means  of  joint 
rules  drawn  upon  agreement  between  employers  and 
employed.  Six  other  associations  have  some  form  of 
conciliation,  while   another  three,  all    in   the  engineering 

110 


industry,  leave  their  labor  troubles  to  the  federation  in 
that  industry.  The  remaining  associations  do  not  deal 
with  labor  problems  at  all. 

§  9.    National  Alliance  of  Employers  and  Employed 

The  importance  and  significance  of  the  National 
Alliance  of  Employers  and  Employed  as  an  organization 
for  common  action  towards  industrial  co-operation  is  so 
great  as  to  call  for  extended  comment.  The  suggestion 
of  such  an  organization  was  made  in  December,  1916,  at 
a  meeting  called  to  deal  primarily  with  demobilization. 
The  sense  of  the  meeting  was  that  the  cordial  and  whole- 
hearted co-operation  of  employers  and  employed  was 
vital  to  the  success  of  any  scheme  dealing  with  recon- 
struction problems.  By  March,  1917,  an  organization  on 
this  basis  had  been  created,  and  by  November,  1917,  had 
approved  a  constitution  admitting  associations  of  em- 
ployers, trade  unions,  individual  companies,  firms,  and 
individuals  to  membership.  Later,  the  terms  of  affiliation 
were  arranged,  so  that  the  two  former  groups  alone  were 
entitled  to  elect  the  Central  Council,  while  the  three 
latter  groups  were  classified  as  associate  members.  The 
organization  of  the  Alliance  has  come  to  consist  of  local 
committees,  area  or  district  committees,  and  federations 
grouped  according  to  geographical  and  industrial  con- 
ditions. 

The  General  Council  of  the  Alliance  is  composed  of 
representatives  of  employers  and  workers,  each  employers' 
association  and  each  labor  organization  having  the  right 
to  appoint  two  members,  and  each  area  or  district  com.- 
mittee  to  appoint  one  employer  and  one  workman.  The 
respective  parties  are  not  equal  in  numbers  on  the  General 
Council,  but  they  are  on  the  Executive  Council,  which 
consists  of  not  more  than  twelve  members  on  each  side. 
District  Committees  also  consist  of  equal  numbers  from 
each  party. 

The  aims  of  the  National  Alliance  of  Employers  and 
Employed,  expressed  in  general  terms,  are  to  promote  the 
active  co-operation  of  employers  and  employed  in  the 
treatment  of  questions  generally  affecting  labor  and  em- 
ployment in  all  trades  and  industrial  occupations,  and  to 
secure  the  welfare  of  the  industrial  workers  of  the  country 
and  the  efficiency  of  its  industries.  More  specifically,  its 
program  names  the  following  points   as   those  to  which 

111 


the  joint  committees  it  sets  up  should  direct  their  atten- 
tion: ^ 

1.  A  living  wage  "sufficient  to  enable  the  workman  to  main- 
tain a  decent  standard  of  life  for  himself  and  those  depend- 
ent upon  him,  and  to  provide  for  the  future.  Beyond 
this  minimum,  the  method  of  remuneration  to  be  such  as 
will  give  the  workman  an  incentive  to  use  his  best  efforts 
on  behalf  of  the  industry  in  which  he  is  employed." 

2.  Regulation  of  hours  of  labor. 

3.  Women  to  be  paid  at  equal  rates  with  men,  if  work,  skill, 
and  output  are  equal. 

4.  Improvement  of  the  conditions  under  which  work  is 
generally  carried  on. 

5.  Satisfactory  housing  conditions  for  all  workers. 

6.  Opportunities  to  be  given  to  workers  to  obtain  a  practical 
and  technical  knowledge  of  the  trade,  and  encouragement 
given  to  them  to  take  a  keen  interest  in  the  efficiency  and 
success  of  the  works,  and  to  afford  the  management  the 
benefit  of  their  knowledge  and  experience.  The  interests 
of  workpeople  in  their  inventions  to  be  safeguarded. 

7.  Joint  committees  to  consider  wages  and  hours  in  relation 
to  the  financial  interests  of  the  industry,  and  to  consider 
questions  of  the  efficiency  of  the  plant  and  methods  of 
production. 

8.  Every  inducement  to  be  offered  to  ensure  the  production 
of  the  maximum  output  of  which  each  individual  is  capable, 
and  every  worker  to  be  allowed  to  receive  as  much  as  the 
nature  of  his  work  and  his  capacity  will  enable  him  to  earn. 

9.  Endeavors  to  be  made  to  keep  workers  employed  during 
times  of  slack  trade. 

10.  Associations  of  employers  and  employed  to  be  encouraged, 
and  agreements  arrived  at  between  them  to  be  accepted 
and  loyally  adhered  to. 

11.  Local  and  national  efforts  to  be  made  to  insure  that  every 
child  shall  have  the  opportunity  of  obtaining  a  liberal 
education  and  the  technical  training  required  for  the 
particular  calling  for  which  it  is  shown  to  be  fitted. 

In  a  note  attached  to  the  statement  of  Its  objects,  the 
Alliance  declares  that  it 

will  not,  unless  specially  requested  to  do  so,  interfere  with 
arrangements  existing  between  employers'  associations  and 
trade  unions  for  the  settlement  of  questions  affecting  wages, 
hours,  and  conditions  of  labor. 

112 


The  activities  of  the  Alliance  have  been  varied.  Most 
of  them  are  carried  out  through  the  district  committees. 
Some  of  these  latter  have  been  called  upon  to  arbitrate  in 
disputes.  Others  are  taking  practical  action  on  the 
housing  question.  The  committee  in  one  center  had 
concentrated  on  the  problems  of  the  joint  organization 
of  trade,  unemployment,  co-partnership,  and  profit  shar- 
ing. This  center,  reporting  on  unemployment,  made  the 
following  significant  observation  :^ 

On  broad  lines  it  may  be  deduced  that  until  steps  are  taken 
which  will  reduce  the  great  fear  of  unemployment  from  the 
masses  of  the  workers,  that  increased  output,  so  necessary  for 
the  future  of  the  country,  cannot  be  hoped  for. 

The  Alliance  as  a  whole  took  certain  steps  in  educating 
public  opinion  and  placing  its  project  before  the  Prime 
Minister,  so  that  the  exact  form  taken  by  the  National 
Industrial  Conference  on  February  22d  was  due  to  its 
initiative. 

For  the  use  of  the  district  committees  and  affiliated 
organizations,  the  Alliance  is  developing  a  Bureau  of 
Industrial  Research,  aiming  to  supply  the  fullest  possible 
information  on  particular  problems  which  concern  equally 
the  welfare  of  employers  and  trade  unionists. 

The  efficiency  of  such  a  method  of  co-operation  as  the 
Alliance  represents  may  be  judged  from  the  testimony  of 
Mr.  E.  Manville,  M.  P.,  President  of  the  Associated 
Chambers  of  Commerce  of  Great  Britain,  and  the  Vlce- 
Chairman  of  the  Executive  Committee.  Speaking  of  an 
association  of  two  years  with  the  activities  of  that  com- 
mittee, he  said: 

During  the  whole  of  this  time  I  have  never  known  a  dead- 
lock to  occur  between  the  employers  and  trade  unionists 
serving  on  it  on  any  vital  point. 

How  far  it  has  been  necessary  to  go  sometimes  in 
placating  labor  Is  seen  In  the  pronouncement  of  its  North 
London  committee,  representing  nine  manufacturers  and 
nine  labor  leaders.  This  committee  has  put  out  the 
following  basic  principles  of  a  working  arrangement 
between  capital  and  labor.- 

^  Unity  (official  organ  of  the  National  Alliance),  June,  1919. 
2  See  The  Times,  March  14,  1919,  and  Unity,  April-May,  1919. 

113 


1.  Industry  rightly  belongs  neither  to  the  capitalists  nor  to 
labor. 

2.  Capital  and  labor  are  morally  and  economically  partners 
in  industry,  and  by  reason  of  their  different  functions  no 
distinction  can  exist  in  the  relative  importance  of  the  ser- 
vices rendered  by  each. 

3.  Neither  the  control  of  industry  nor  its  benefits  can  be 
rightfully  claimed,  or  advantageously  possessed,  either  by 
owners  of  capital  invested  or  labor  engaged,  to  the  ex- 
clusion of  the  other. 

4.  The  function  of  capital  is  that  it  be  applied  productively 
and  sufficiently  for  the  general  good. 

5.  The  function  of  labor  is  to  produce  to  its  full  capacity. 

6.  The  "standard  of  living,"  representing  as  it  does  the 
division  of  the  commodities  produced  by  the  community 
amongst  its  members,  is  directly  proportional  to  produc- 
tion, provided  that  the  said  division  is  equitable,  having 
regard  to  services  rendered. 

7.  The  rewards  rightly  due  for  services  rendered  are  as  follows: 
First,  to  labor  a  reasonable  living  wage;  secondly,  to 
capital,  in  respect  of  money  secured  by  assets,  a  reasonable 
fixed  rate  of  interest,  sufficient  to  secure  its  employment; 
thirdly,  to  labor,  50  per  cent  and  to  capital  50  per  cent  of 
the  net  divisible  profits. 

8.  The  term  "labor"  comprises  workers  both  by  hand  and 
brain,  and  includes  management. 

§  10.     Some  Other  Purposes 

The  joint  rules  in  force  in  the  shipbuilding,  engineering, 
and  cotton  industries  provide  for  automatic  conciliation, 
guaranteed  by  representative  bodies  on  each  side.  In 
each  case,  no  lockout  or  strike  is  to  occur  till  a  regular  and 
definite  procedure  is  adopted,  providing  for  conference 
between  representatives  of  either  party.  In  the  ship- 
building industry,  when  yard  committees,  district  and 
national  committees  have  failed  to  adjust  a  dispute, 
arbitration  is  resorted  to.  In  the  engineering  or  metal 
trades  the  final  step  is  one  of  conciliation  at  the  hands  of 
the  national  executives  of  the  employers'  and  workers' 
organizations  respectively.  In  the  cotton  industry  the 
same  procedure  before  local  and  national  joint  bodies 
representative  of  cither  party  is  carried  out.  But  the 
rules  further  provide  that  during  the  continuance  of  a 
strike  or  lockout  periodical  meetings  shall  be  held  between 

114 


the  national  executives  of  the  parties.    These  meetings  are 
to  take  place  every  four  weeks, 

until  the  dispute  be  settled,  and  without  any  formal  applica- 
tion bv  either  party  for  any  such  meeting. 

Other  objects  of  employers'  associations  dealing  with 
labor  problems  sometimes  include  measures  of  common 
defense.  Thus  the  general  secretary  of  the  national 
federation  is  in  three  cases  required  to  collect  particulars 
of  all  local  demands,  strikes,  and  disputes,  so  that  the 
Federation  may  be  forearmed.  Other  associations  refuse 
to  employ  men  on  strike  or  locked  out  from  the  workshop 
of  another  member  of  the  same  association,  provided  that 
the  dispute  has  been  approved  by  the  association.  In 
several  cases,  an  inquiry  form  is  circulated  among  members 
of  associations  giving  particulars  of  the  industrial  standing 
of  an  applicant  for  employment.  In  one  case,  the  regula- 
tions provide  that  one  employer  may  not  "poach"  upon 
the  workers  of  another  employer  in  the  same  association. 
In  two  associations,  lockouts  may  not  be  ordered  except 
on  a  two-thirds  majority,  in  one  case  taken  by  a  referen- 
dum among  the  federated  associations,  in  the  other 
case  by  a  vote  of  the  executive,  confirmed  by  a  three- 
fourths  majority  in  a  general  meeting  of  the  association. 

Two  associations  revealed  the  presence  of  an  effort  to 
give  both  manufacturers  and  workers  a  clearer  idea  of  the 
economic  problems  of  the  industry.  In  other  cases,  the 
need  was  recognized,  though  nothing  had  been  done. 
Other  associations,  in  which  the  Whitley  scheme  for  joint 
industrial  councils  had  been  adopted,  expected  that  a 
common  process  of  discussion  upon  the  economic  needs  of 
the  industry  would  have  an  educative  effect.  Others 
found  that  the  meetings  of  the  associations,  whether 
local  or  national,  did  much  to  call  forth  from  manufactur- 
ers a  clearer  exposition  of  their  position  than  the  public 
were  accustomed  to  get.  Thus,  in  The  Builder,  the  offi- 
cial organ  of  the  Builders'  Federation,  there  occurs  the 
following  statement:'- 

Organization  is  the  builders'  most  effective  weapon  in 
dealing  with  labor  difficulties,  whilst  it  is  also  the  only  effectual 
means  of  educating  the  public  as  to  the  rights  of  a  class  of  men 
who  are  more  frequently  unjustly  criticized  and  condemned 
than  those  of  any  other  calling. 

1  The  Builder,  August  10,  1917. 

115 


The  secretary  of  the  Builders'  Federation,  in  an  inter- 
view showed  how  the  activities  of  the  Federation  were 
aimed  towards  the  uplifting  of  the  industry  and  the 
economic  education  of  builders  generally.  An  attempt 
was  being  made  to  get  the  industry  professionalized,  so 
that  the  lump  contract  system  could  be  replaced  by  that 
on  which  architects  work,  and  standard  forms  of  estimates 
and  contracts  and  standard  methods  of  measuring  quan- 
tities adopted. 

The  efforts  made  by  the  two  associations  which  have 
attacked  the  economic  problems  of  their  industry  are 
interesting.  One,  which  manufactures  an  article  beyond 
the  reach  of  workers,  has  put  out  a  statement  to  its  work- 
ers analyzing  the  cost  of  production  of  that  article,  and 
stressing  the  conclusion  that  this  article  can  only  come 
within  the  reach  of  the  workers  by  reason  of  increased 
output  on  their  part  and  a  consequent  reduction  in  the 
unit  cost  of  production.  The  other  association,  the  Fed- 
eration of  Master  Printers,  has  a  cost  system  which  was 
worked  out  by  a  committee  of  the  Federation  and  is  in 
operation  in  almost  all  large  workshops  in  the  industry. 
The  Federation  is  starting  an  educational  propaganda 
mainly  to  show  employees  the  economic  basis  of  the 
system,  and  the  degree  to  which  it  includes  and  protects 
their  wages.  The  joint  Industrial  Council  for  the  indus- 
try has  endorsed  the  system,  including  among  its  "agreed 
principles"  the  following: 

That  all  employers  should  adopt  and  use  for  costing  and 
estimating  a  uniform  costing  system  approved  by  the  Na- 
tional Executive  or  be  guided  by  any  schedule  of  hourly  cost 
rates  issued  for  their  district  and  approved  by  the  National 
Executive. 


§11.      French  and  Italian  Organizations 

The  organizations  of  employers  in  France  have  tended 
toward  the  type  represented  by  the  Chambers  of  Com- 
merce in  the  United  States.  They  have  sought  to  deal 
with  general  questions  touching  the  industry  as  a  whole 
or  with  questions  of  trade.  Such  subjects  as  freight  rates, 
credit  reports,  insurance  rates,  foreign  trade  conditions, 
come  before  them.  With  the  secretaries  of  each  are 
associated  experts  to  analyze  and  make  available  the  in- 
formation that  comes  in. 

110 


"Most  of  them  support  professional  schools,  lecture  courses, 
laboratories,  etc.,  issue  prizes  for  special  work  affecting  the 
trade  involved,  collect  libraries  of  technical  works,  and  fre- 
quently undertake  social  welfare  work  in  behalf  of  their  mem- 
bers and  the  workmen  in  their  plants.  Bulletins  are  issued 
monthly  and  annually,  and  they  are  of  the  greatest  interest 
asthrowinglight  on  the  development  of  the  respective  trades."^ 

They  are  generally  known  as  employers'  syndicats 
{Syndicats  Patronaux).  The  first  employers'  syndicat 
was  organized  in  Paris,  1857,  and  was  called  the  National 
Union  of  Commierce  and  Industry. 

Of  these  employers'  associations  there  were,  in  1914, 
some  4,967.  All  together  their  members  totaled  403,143, 
among  whom  there  were  10,300  women  members.^  In- 
dustrial conditions  during  and  since  the  war  have  given 
them  strength  and  activity.  Your  Commission  was  told 
that  French  employers  are  getting  together  as  never 
before. 

There  is  another  type  of  organization  in  France  in- 
volving the  employers.  It  is  called  the  "yellow"  {jaune) 
or  mixed  syndicat,  and  is  made  up  of  a  combination  of 
employers  and  employees.  Of  these  there  were,  in  1914, 
233  syndicats,  with  51,111  members.^  Relatively  weak, 
the  mixed  syndicat  has  still  accomplished  something  in 
bringing  the  workman  into  association  with  the  employer. 
The  purpose  of  such  syndicats  is  very  similar  to  that  of 
employers'  syndicats. 

The  French  employers'  associations,  being  relieved 
from  the  burden  of  a  tremendous  labor  problem,  have  been 
free  to  turn  to  matters  of  trade.  The  Union  of  Metal- 
lurgical and  Mining  Industries  and  Affiliated  Industries 
is  a  leading  organization  in  the  world  for  the  comprehen- 
siveness of  its  scientific  information.  Your  Commission 
met  with  som.e  representatives  of  the  Automobile  Asso- 
ciation of  France  and  found  them  most  keenly  alive  to  the 
problems  of  that  Industry.  They  were  complacent  about 
handling  the  labor  problem,  but  matters  of  finance. 
Imports,  raw  materials  weighed  heavily  with  them. 

Your  Commission  found  a  movem.ent  on  foot  to  organ- 
ize the  employers  of  all  the  important  industries  of  North- 
ern Italy.     We  were  told  that  the  employers  in  the  metal 

^  Franco-American  Trade,  p.  86. 
^  Statistique  Generate,  p.  134. 
'  Ibid. 

117 


interests  were  organized  and  working  together.  The 
textile  manufacturers  also  have  their  organization.  There 
met  in  Turin,  April  23d,  a  convention  of  employers  from  the 
entire  industrial  section  of  Northern  Italy  to  discuss  the 
question  of  the  eight-hour  day  and  the  minimum  wage. 
But,  as  in  France,  the  labor  union  problem  has  not  brought 
them  together. 

There  is  the  Societa  Italiana  per  Azio7ii  (Association 
of  Anonymous  Share  Companies),  which  is  said  to  be  the 
most  important  manufacturers'  association  in  Italy.  A 
plan  has  been  drawn  up  for  the  constitution  of  a  General 
Confederation  of  Italian  Industry. 

Statute  of  the  General  Confederation  of  Italian 

Industry 

1.  There  is  constituted,  with  seat  in  Rome,  the  General 
Confederation  of  the  Itahan  Industry. 

2.  The  Confederation  intends  to  promote  and  protect  in  all 
fields  the  general  interests  of  the  national  production. 

3.  There  are  admitted  to  join  the  Confederation: 

(a)  All  national  companies  of  Industry  and  Association 
of  the  Share  Companies.    (Section  A.) 

{b)  Industrial  Associations  devoted  specially  to  the  study 
and  solution  of  problems  relative  to  intercourse  be- 
tween manufacturers  and  labor.     (Section  B.) 

(c)  Associations  of  Manufacturers  with  only  a  regional 
and  local  character.     (Section  C.) 

4.  The  Office  of  Presidency  of  the  Confederation  will  decide 
without  appeal  upon  the  admission  of  companies. 

5.  The  Confederation  is  ruled  by  a  Board  of  Delegates  and 
the  President. 

6.  The  Board  of  Delegates  is  formed  by  four  representatives 
of  the  Association  among  Share  Companies,  by  a  repre- 
sentative of  all  associations  included  in  Section  A  and  of  the 
Directions  of  Sections  B  and  C. 

7.  Said  Board  meets  once  every  six  months,  and  also  at 
different  extraordinary  periods  if  the  President  considers 
it  necessary,  or  if  it  be  demanded  by  at  least  three  associa- 
tions. In  the  Board  presided  over  by  the  General  President 
each  member  present  is  entitled  to  a  vote. 

8.  For  the  validity  of  meetings,  there  is  necessary,  in  a 
first  convocation,  the  presence  of  at  least  one  third  of  the 
members;  in  a  second  convocation  the  meeting  is  valid 
whatever  be  the  number  r)f  the  members  present,  and  the 
deliberations  arc  taken  by  the  majority  of  those  present. 

118 


9.  The  meetings  of  the  Board  can  also  be  held  in  different 
towns,  out  of  the  confederal  seat.  They  are  assembled 
by  the  President  with  a  notice  to  be  sent  round  at  least  ten 
days  before  the  date  fixed  for  the  meeting,  except  in  emer- 
gency cases  in  which  said  notice  can  be  made  by  wire. 

10.  The  Board  has  authority  to  appoint  the  General  President, 
to  approve  the  budgets,  and  to  decide  the  general  direction 
of  the  actions  of  the  Confederation;  the  President  has 
the  widest  power  upon  the  organization  and  the  working 
of  the  Confederation. 

11.  The  President's  office  is  formed  by  the  General  President 
and  by  four  Vice-Presidents;  two  of  these  are  appointed  by 
Associations  of  Section  A;  the  other  two  will  be,  by 
authority,  Presidents  of  the  Direction  of  Sections  B  and  C. 

12.  The  General  President  is  appointed  in  the  first  yearly 
meeting  of  the  Board  and  can  be  appointed  again  for  four 
years  consecutively. 

13.  Sections  B  and  C  shall  have  each  a  special  Direction  formed 
by  five  members  appointed  by  the  Associations  inscribed 
in  the  respective  sections.  The  appointment  will  be  made 
in  the  first  three  months  of  each  year,  by  voting  through 
correspondence. 

14.  Each  of  the  Sections  B  and  C  will  make  its  own  rules,  to  be 
approved  also  by  the  President's  Office. 

15.  The  yearly  contribution  of  the  Associations  to  the  Con- 
federations is  fixed  as  follows: 

(a)  1,000  lire  for  Associations  of  Section  A. 

(b)  0,10  lire  per  each  workman  controlled  by  the  Associa- 
tions  of  Section  B. 

(c)  250  lire  for  Associations  of  Section  C. 

The  rules  of  Sections  B  and  C  can  fix  special  contributions 
for  their  associated  parties. 

16.  The  Association  that  does  not  observe  the  rules  of  the 
Confederation  can  be  excluded  from  same,  by  decision 
without  appeal  of  the  Board,  based  upon  the  majority  of 
two  thirds  of  the  members  present. 


§  12.    Results 

The  results  achieved  by  the  formation  of  employers' 
associations  with  purposes  and  aims  as  sketched  have 
been  manifold.  In  the  case  of  the  associations  inaugu- 
rated during  the  war,  it  is  difficult  to  disentangle  the 
results  due  to  the  national  pressure  from  those  which 
followed  upon  co-operation  with  other  employers.  The 
national   needs   can,   however,   best  be   regarded   as   the 

119 


stimuli  which  furnished  the  motive  for  association,  and 
made  the  results  of  association  appear  more  readily  and 
speedily. 

The  first  general  result  was  a  quickening  of  industry. 
The  jealousy  and  individualism  which  had  stood  in  the 
way  gave  place  to  a  readiness  to  share  ideas  and  to  work 
towards  a  common  end.  The  process  of  sharing  ideas 
had  its  reverse  in  revealing  deficiencies,  while  co-opera- 
tion between  persons  engaged  in  the  same  industry  meant 
doubled  efficiency.  A  speaker  at  the  annual  meeting  of 
the  Federation  of  British  Industries,  December,  1918, 
recounted  the  experience  of  a  friend,  who 

said  that  there  was  one  firm  only  in  his  experience  who  had 
discussed  certain  matters  with  him  without  any  reserve  at  all. 
Each  had  told  the  other  exactly  what  it  was  doing,  one  firm 
being  at  one  end  of  the  process  and  the  other  at  the  other. 
They  put  their  information  on  the  table  together,  and  he  had 
no  hesitation  in  saying  that  the  result  of  exchange  of  views 
was  to  reduce  cost  by  10  shillings  a  ton.  The  information  at 
the  disposal  of  one  just  supplemented  the  information  at  the 
disposal  of  the  other. 

This  personal  experience  has  been  repeated  in  that  of 
several  of  the  industries  which  were  organized  during  the 
war,  and  by  discussion  and  the  interchange  of  information 
acquired  fresh  strength  and  resourcefulness,  as  well  as 
added  efficiency. 

Further,  the  formation  of  employers'  associations  has 
enabled  employers  to  represent  their  cause  more  effectively 
before  the  public,  the  Government,  and  the  trade  unions. 
The  process  of  organization  has  necessitated  a  certain 
quantity  of  economic  augmentation,  and  the  public 
has  learned  to  find  among  employers^  advocates  and 
defenders  who  would  have  remained  silent  in  their  own 
cause,  but  have  come  forward  to  speak  for  industry 
generally. 

The  Government,  too,  whose  activities  were  so  greatly 
extended  during  the  war,  has  learned  where  to  look  for 
guidance  concerning  industry  now  that  industry  is  so  well 
organized.  The  earlier  position  is  illustrated  by  a  state- 
ment of  Mr.  Dudley  Docker,  first  President  of  the  Federa- 
tion of  British  Industries. 

*  For  instance,  Mr.  W.  L.  Hichens,  Mr.  Samuel  Turner,  Mr.  Ernest  Benn,  and 
others. 

120 


i 


If  the  Government  ever  took  the  trouble  to  ascertain  the 
views  of  the  manufacturer,  or  of  the  large  employer  of  labor, 
they  have  in  the  past  generally  selected  some  individual  at 
haphazard,  who  had  no  right  to  do  more  than  give  his  indivi- 
dual opinion  and  was  incapable  of  voicing  the  views  of  British 
trade. 

Even  when  the  Government  did  choose  to  consult  an 
association  they  did  not  consider  larger  associations 
which  would  be  affected  by  their  action.  A  glaring 
illustration  of  the  effects  of  such  a  policy  occurred  in  con- 
nection with  the  granting  of  the  12]/2  per  cent  bonus  to 
time  workers  by  the  Minister  of  A^Iunitions,  in  1917.  Mr. 
Churchill  consulted  the  Engineering  Employers'  Federa- 
tion, which  made  strong  representations  on  several 
points,  but  especially  as  to  the  effect  which  the  granting 
of  an  advance  in  the  case  of  any  particular  class  or  classes 
of  time  workers  would  have  on  any  other  classes  of 
workers.  Air.  Churchill  disregarded  this  advice,  and 
failed  to  consult  other  associations.  The  sequel  was  the 
extension  of  the  bonus  to  practically  all  time  workers 
throughout  the  country,  with  a  corresponding  bonus  for 
pieceworkers.  The  effective  organization  of  each  in- 
dustry, and  the  creation  of  the  Federation  of  British 
Industries  as  the  representative  of  all  employers  has  given 
the  Government  effective  channels  through  which  to  act 
in  relation  to  industry. 

At  the  same  time  the  increase  in  strength  of  employers' 
associations  has  paralleled  that  of  trade  unions,  and  thus 
created  an  equilibrium.  Since  trade  unions  are  recog- 
nized, and  collective  bargaining  carried  on  with  them, 
this  equality  has  no  implication  of  defense,  yet  it  has 
considerable  significance  in  the  obtaining  and  keeping  of 
just  agreements.  Further,  it  secured  uniformity  in  agree- 
ments concerning  wages  and  hours.  Prior  to  a  more 
complete  degree  of  organization,  individual  employers 
found  their  well-organized  employees  following  a  policy 
of  attacking  each  employer  singly,  and  thus  producing 
an  inequality  of  concessions  and  conditions  that  was  very 
damaging. 

The  growth  of  associations  has  strengthened  the  smaller 
firms  within  an  industry  and  has  given  the  industry  itself 
greater  assurance.  One  effect  of  this  increased  strength 
and  confidence  is  the  growing  tendency  toward  price- 
fixing  mentioned  in  the  discussion  of  the  functions  of  asso- 

121 


ciations.  While  some  of  this  is  due  to  government  control 
during  the  war,  and  to  the  circumstances  under  which 
many  of  the  associations  came  into  existence,  its  continu- 
ance is  intimately  correlated  with  the  more  complete 
organization  of  the  industry. 

§  13.     Summary 

The  functions  of  employers'  associations,  especially  in 
Great  Britain,  cover  practically  the  whole  range  of  indus- 
trial purposes.  Measures  are  taken  to  strengthen  and 
develop  industry  and  promote  the  interests  of  manufac- 
turers therein.  The  efficiency  of  the  industry  is  a  prime 
matter  of  concern,  and  scientific  research  and  technical 
education  are  promoted  as  means  to  that  end.  The 
science  of  statistics  is  being  used  to  inform  and  guide 
manufacturers  on  matters  that  hitherto  lay  outside  their 
ken.  Matters  of  price-fixing  and  better  organization 
for  selling  are  receiving  attention.  On  the  side  of  labor 
relations,  while  questions  of  wages  and  hours  and  the 
actual  settlement  of  disputes  constitute  a  large  part  of  the 
problems  of  associations,  the  chief  trend  of  activity  is  in 
the  direction  of  the  establishment  of  machinery  for  pro- 
moting amicable  arrangements  and  relations  between 
employers  and  workers.  Some  little  attention  is  given 
to  matters  of  common  defense  against  the  activities  of 
trade  unions  and  to  forms  of  economic  education. 


122 


CHAPTER  VII 
SHOP    STEWARDS 

§1.    The    Question    of    Outside    Influence 

Out  of  the  unrest  and  general  discontent  among 
British  workers  of  the  present  day,  new  sets  of  demands 
are  being  brought  forward  by  various  agencies  in  organ- 
ized labor.  Not  only  are  many  of  these  new  demands  very 
extreme  and  far-reaching  in  character,  but  the  agencies 
also  through  which  they  are  being  urged  are  significant. 
There  is  a  widespread  and  determined  desire  on  the  part 
of  labor  to  take  over  a  share  of  industrial  control,  and 
organizations  for  carrying  through  such  a  policy  are 
developing. 

A  point  of  marked  importance  to  employers  is  as  to  the 
methods  of  dealing  with  their  workers.  Shall  outside 
influences,  through  unions,  through  delegates  of  unions, 
or  councils  organized  by  governmental  action,  enter  into 
the  settlement  of  disputes  arising  in  local  establishments 
between  individual  employers  and  their  employees.^ 
Shall  labor  have  authority  to  decide  on  matters  of  manage- 
ment hitherto  reserved  to  the  owner  of  the  establishment.^ 
Here  is  to  be  found,  undoubtedly,  the  crux  of  the  question 
as  to  the  attitude  of  employers  to  shop  stewards,  works 
committees,  joint  councils,  and  industrial  conferences. 
It  is  one  thing  to  have  an  opportunity  for  employers  and 
their  employees  to  confer  together  in  a  committee  repre- 
senting the  whole  body  of  workers  In  an  establishment  on 
matters  of  local  and  mutual  concern;  it  is  quite  a  different 
thing  to  have  outside  forces  enter  to  apply  general  policies 
in  individual  establishments.  The  latter  methods  stir  up 
the  antagonism  arising  from  the  natural  desire  of  men  to 
settle  their  own  afl"alrs  without  outside  dictation. 


§  2.     Shop  Stewards 

Before  the  war  the  majority  of  British  Trade  Unions 
had  officials  in  the  shops,  known  by  various  names — such 
as  "Shop  Delegates,"  "Collectors,"  or  "Shop  Stewards," 
but  they   had   no  place      in   the   settlement  of  disputes 

123 


between  workers  and  employers.^  In  the  main,  these 
union  shop  stewards  aided  the  purposes  of  the  unions 
by  such  duties  as  collecting  dues,  bringing  newcomers 
into  the  organization,  and  watching  for  violations  of 
union  rules  and  customs.  These  delegates  claimed  the 
privilege  of  going  freely  about  the  shops  without  notifying 
the  foremen;  but  such  concessions  were  not  granted  by  all 
employers.  It  is  to  be  noted  that  these  officials  were 
imported  into  an  establishment  to  serve  the  purposes  of 
an  outside  body  which  professed  a  concern  as  to  the  in- 
terests of  individuals  employed  therein.  If  originating 
in  other  ways,  they  soon  became  absorbed  into  the  trade 
union  organizations. 

The  functions  of  shop  stewards  began  to  change  with 
changes  in  the  nature  of  the  laborers'  demands.  They 
appeared  upon  committees  for  the  arrangement  of  prices 
for  piecework.  Originally  they  were  representatives  of 
their  crafts.  Elected  at  the  start  by  the  unions,  their 
relation  to  the  unions  has  varied.  Sometimes  the 
branch  selecting  them  did  not  have  a  large  membership 
in  the  works  where  they  were  placed.  Sometimes  they 
were  appointed  by  the  district  committee.  Thus  they 
formed  a  kind  of  machinery  which  did  not  always  provide 
a  direct  medium  of  dealing  between  the  employer  and  his 
own  workers.  Too  often  they  came  from  forces  working 
outside  the  Individual  plants. 

§  3.     Effect  of  War  Conditions 

In  addition  to  the  industrial  unrest  that  had  been 
gathering  before  the  war,  new  conditions  produced  by 
the  war  aggravated  the  situation.  As  we  have  seen,  the 
introduction  of  new  automatic  machinery,  together  with 
the  employment  of  semi-skilled  and  unskilled  laborers 
(i.e.,  dilution),  and  the  withdrawal  of  some  union  restric- 
tions, raised  many  new  questions.  The  labor  policy  of  the 
Government  in  state-controlled  Industries  was  also  vacil- 
lating and  uncertain.  Many  misunderstandings  were 
caused  by  the  action  of  governmental  officials  which 
were  charged  against  the  employers.  Official  regulations 
regarding  dilution  stirred   up  antagonism.     In  addition, 

'  The  American  "  walking  delegate  "  is  a  person  not  employed  as  a  worker  in 
the  individual  shop;  the  British  "shop  steward"  is  so  employed.  The  word 
"  works,"  as  used  in  this  discussion,  means  shop  or  plant  or  manufacturing 
establishment. 

124 


the  steady  preaching  of  sociaHstIc  doctrine  that  labor  was 
the  chief,  if  not  the  sole,  factor  of  production  began  to 
raise  claims  for  a  share  in  industry  corresponding  to  the 
new  teachings.     Thus  discontent  grew  and  widened. 

Out  of  this  situation  during  the  war  there  developed 
a  loss  of  confidence  in  the  power  and  prestige  of  the  trade 
union  authorities: 

In  many  cases  the  trade  union  representatives  have  by 
constitutional  methods  endeavored,  but  in  vain,  to  procure 
the  settlement  of  difficulties.  The  workpeople  have  gained 
the  impression  that,  if  they  wish  for  any  improvement  in  their 
conditions,  they  must  take  the  matter  into  their  own  hands 
and  bring  pressure  to  bear  upon  the  Government.  Action  by 
the  men  themselves  has  been  able  to.  force  the  Government  to 
decide  that  which  they  had  refused  or  delayed  to  decide  when 
approached  in  a  constitutional  way  by  the  trade  union 
representatives.  The  result  has  been  a  loss  of  confidence  in  the 
trade  union  itself.' 

That  is,  the  shortcomings  of  government  management 
increased  the  difficulties  of  the  labor  situation. 

In  connection  with  "dilution,"  the  skilled  workers 
feared  a  loss  of  status  for  skilled  crafts  and  a  lessened 
power  of  their  craft  unions.  If  they  took  in  the  new  work- 
ers, it  tended  to  transform  craft  unions  into  those  based 
on  an  industry.  In  the  emergencies  of  the  generally 
disturbed  situation,  ambitious,  radical  young  men  saw 
their  opportunity  to  gain  power  and  influence  through 
the  position  of  shop  stewards.  Working  within  their  own 
individual  shops,  appealing  to  the  fear  of  craft  destruction 
and  other  causes  of  discontent,  they  secured  a  very  large 
following  even  among  those  workers  who  had  once  dis- 
approved of  the  methods  of  some  shop  stewards.  This 
rising  tide  of  new  forces  became  known  as  the  "Rank- 
and-File  Movement,"  or  the  "Shop  Steward  Movement," 
and  soon  became  a  serious  menace  to  the  authority  of  the 
established  unions.  The  rank  and  file  proposed  to  act 
unofficially  and  independently  of  the  union  leadership. 
The  result  was  the  calling  of  what  was  termed  the  "un- 
authorized" strike  (that  is,  unauthorized  by  union  offi- 
cials), organized  by  the  shop  stewards,  which  first  broke 
out  on  the  Clyde  in  February,  1915. 

There  then  was  organized  out  of  the  shop  stewards  a 
strike   committee   known   as    the   "Clyde    Labour  With- 

^  "Commission  of  Inquiry  into  Industrial  Unrest,  London  and  Southeastern 
Area,"  p.  5,  par.  7. 

125 


drawal  Committee,"  which  engineered  the  strikes  on  the 
Clyde  in  March  and  April,  1916.  In  effect,  these  strikes 
were  brought  on  to  force  a  recognition  of  the  shop  ste- 
wards movement  by  employers,  the  trade  unions,  and  by  the 
Government.  Elsewhere  "Workers'  Committees,"  after 
the  Clyde  model,  were  established,  followed  by  strikes 
at  Barrow  (June  26-July  2,  1916),  Sheffield  (November 
16-19,  1916),  Manchester  (November  30-December  5, 
1916),  Tyne  (March  19-25,  1917),  Swansea  (June  25-July 
2, 1917),  Mersey  (July  6-18,  1917),  and,  finally,  of  50,000 
aircraft  workers  at  Coventry  (November  26-December 
3,  1917). 

It  is  obvious  that  the  terms  "Shop  Stewards"  and 
"Works  Committees"  must  be  used  with  discrimination. 
The  revolutionary  element  among  laborers  expressed  itself 
in  these  agencies.  They  made  an  effort  for  an  expansion 
of  their  policy  in  a  National  Industrial  Council  of  Shop 
Stewards  and  Workers'  Committees  to  secure  "a  clearer 
perception  of  working-class  industrial  needs  and  more 
cohesive  action  in  the  direction  of  their  attainment."^ 
Their  objects  were  no  longer  the  correction  of  shop  prac- 
tices and  the  like.  As  a  separatist  body  they  antagonized 
the  regular  unions,  because  these  were  considered  too 
slow  and  too  conservative,  and  they  presented  new 
demands  on  industry  as  a  whole.  They  claimed  that, 
under  the  new  and  complicated  conditions  produced  by 
the  war,  the  union  leaders  had  become  detached  from  the 
practical  problems  of  the  shop  and  were  thus  unfitted  to 
meet  the  managers  and  experts  at  conferences. 

On  technical  points  bargains  are  frequently  made  which 
work  out  badly  in  practice;  the  men  chafe  under  the  agree- 
ments; they  lose  confidence  in  the  leaders;  and  the  results 
are  obvious  in  the  lack  of  discipline  and  the  growing  number 
of  unauthorized  strikes.^ 

Thus,  while  the  shop  stewards  were  set  against  the 
union  leaders,  by  a  curious  paradox  the  employers  were 
induced  to  turn  to  the  more  radical  shop  stewards.  As 
we  have  seen,  the  natural  attitude  of  the  employer  was 
to  deal  directly  with  his  own  men  rather  than  with  forces 
outside  the  shop,  such  as  union  organizations  having  a 
general  or  national  policy.  Therefore  to  the  employer 
the  shop  steward  system  seemed  to  furnish  a   return   to 


'  The  Engineer,  January  4,  1918. 

2  Ibid. 


126 


direct  dealings  between  the  individual  employer  and  his 
own  workers.  But  If  he  relied  on  this  hope,  he  soon 
found  himself  dealing  with  a  general  point  of  view  more 
radical  than  that  of  the  unions. 

When  employers  were  invariably  in  favor  of  settling  local 
disputes  locally  and  with  their  workmen,  the  trade  unionists 
demanded  nothing  less  than  national  settlements.  There  was 
much  agitation  and  there  were  many  strikes  on  this  very 
question.  The  unions  eventually  won  their  point,  not  so  much 
by  argument  as  by  force.  Now  that  the  employers,  reluctantly 
forced  into  a  policy  of  national  treatment  of  local  questions, 
desire  to  settle  down  and  make  the  best  of  the  new  conditions, 
and  observe  the  rules  of  this  trade-union  created  procedure, 
the  men  have  switched  back  to  the  principle  of  local  auto- 
nomy.^ 

Thus  there  has  arisen  a  tendency,  especially  with 
government  officials,  as  in  the  proposals  for  Whitley 
Councils  and  Industrial  Conferences,  to  support  the  union 
authority  as  the  lesser  evil.  But,  since  the  leadership 
among  shop  stewards  is  In  the  hands  of  radical  and  even 
revolutionary  young  men,  it  remains  to  be  seen  whether 
their  policy  will  be  forced  on  the  established  unions, 
or  whether  the  latter  will  dominate  the  "rank-and-file" 
movement  and  confine  the  shop  stewards  to  purely  ad- 
ministrative functions.  Recent  events,  however,  as  In 
the  case  of  the  coal  miners,  show  that  the  extreme  element 
has  got  out  of  hand  and  is  determined  to  use  "Industrial 
action,"  or  a  policy  of  force.  The  power  of  the  revo- 
lutionary movement  was  such  as  to  draw  In  many  of 
the  shop  stewards  who  ceased  to  report  to  their  trade 
unions.  They  have  become  "class  conscious  men  and 
women  who  have  in  view  neither  the  restitution  of  war 
conditions  nor  'the  permanent  Improvement  of  relations 
between  employers  and  employees.'  "^ 

§  4.   Attempt  to  Regularize  Shop  Stev^ards 

The  next  step  In  the  evolution  came  with  an  effort  of 
the  established  unions  to  "regularize"  the  shop  stewards 
by  confining  them  to  administrative  functions,  and  by 
recognizing  their  committees  as  official  committees  of 
the  unions.     The  point  of  interest,  of  course,  resides  In 

^  The  Engineer,  January  4,  1918. 

^  Cf.  J.  T.  Murphy,  in  Solidarity,  the  organ  of  Workers'  Committees,  October, 
1918. 

127 


noting  how  far  the  union  policy  has  been  made  more 
radical  in  carrying  out  such  a  compromise.  It  is  clear, 
however,  that  the  explosive  power  of  revolutionary 
purpose,  even  if  its  influence  through  shop  stewards 
should  be  limited,  will  break  out  in  another  form,  until 
it  is  squarely  met  and  subdued.  For  the  present,  it 
should  be  recorded  that  after  the  Coventry  strike  (Nov- 
ember 26-December  3,  1917),  thirteen  of  the  principal  en- 
gineering trade  unions,  not  including  the  Amalgamated 
Society  of  Engineers,  declared  their  policy  in  the  well- 
known   Shop  Stewards'  Agreement,  December  20,   1917: 

With  a  view  to  amplifying  the  provisions  for  avoiding  dis- 
putes it  is  agreed: 

1.  The  workmen  who  are  members  of  the  above  named 
trade  unions  employed  in  a  federated  establishment,  may 
appoint  representatives  from  their  own  number  to  act  on  their 
behalf  in  accordance  with  the  terms  of  this  agreement. 

2.  The  representatives  shall  be  known  as  shop  stewards. 

3.  The  method  of  election  of  shop  stewards  shall  be 
determined  by  the  trade  unions  concerned,  and  each  trade 
union  party  to  this  agreement  may  appoint  shop  stewards. 

4.  The  names  of  the  shop  stewards  and  the  shop  or  portion 
of  a  shop  in  which  they  are  employed  and  the  trade  union  to 
which  they  belong  shall  be  intimated  officially  by  the  trade 
union  concerned  to  the  management  on  election. 

5.  Shop  stewards  shall  be  subject  to  the  control  of  the  trade 
unions,  and  shall  act  in  accordance  with  the  rules  and  regula- 
tions of  the  trade  unions  and  agreements  with  employers  so  far 
as  these  affect  the  relation  between  employers  and  work- 
people. 

6.  In  connection  with  this  agreement  shop  stewards  shall 
be  afforded  facilities  to  deal  with  questions  raised  in  the  shop 
or  portion  of  a  shop  in  which  they  are  employed.  In  the  course 
of  dealing  with  these  questions  they  may,  with  the  previous 
consent  of  the  management  (such  consent  not  to  be  unreason- 
ably withheld),  visit  any  other  shop  or  portion  of  a  shop  in  the 
establishment.  In  all  other  respects  they  shall  conform  to 
the  same  working  conditions  as  their  fellow  workmen. 

7.  Employers  and  shop  stewards  shall  not  be  entitled  to 
enter  into  any  agreement  inconsistent  with  agreements 
between  the  Engineering  Employers'  Federation  or  local 
associations  and  the  trade  unions. 

8.  The  functions  of  shop  stewards  so  far  as  they  arc  con- 
cerned with  the  avoidance  of  disputes  shall  be  exercised  in 
accordance  with  the  following  procedure: 

128 


(a)  A  workman  or  workmen  desiring  to  raise  any  question 
in  which  he  or  they  are  directly  concerned  shall  in  the 
first  instance  discuss  the  same  with  his  or  their  foreman. 

(b)  Failing  settlement,  the  question  shall,  if  desired,  be 
taken  up  with  the  management  by  the  appropriate  shop 
steward  and  one  of  the  workmen  directly  concerned. 

(c)  If  no  settlement  is  arrived  at,  the  question  may,  at  the 
request  of  either  party,  be  further  considered  at  a 
meeting  to  be  arranged  between  the  management  and 
the  appropriate  shop  steward  together  with  a  deputa- 
tion of  the  workmen  directly  concerned.  At  this  meet- 
ing the  organizing  district  delegate  may  be  present,  in 
which  event  a  representative  of  the  Employers'  Associa- 
tion shall  also  be  present. 

(d)  The  question  may  thereafter  be  referred  for  further 
consideration  in  terms  of  the  provisions  for  avoiding 
disputes. 

{e)  No  stoppage  of  work  shall  take  place  until  the  question 
has  been  fully  dealt  with  in  accordance  with  this  agree- 
ment and  with  the  provisions  for  avoiding  disputes. 

9.  In  the  event  of  a  question  arising  which  affects  more 
than  one  branch  of  trade  or  more  than  one  department  of 
the  works  the  negotiation  thereon  shall  be  conducted  by  the 
management  with  the  shop  stewards  concerned.  Should  the 
number  of  shop  stewards  concerned  exceed  seven,  a  deputation 
shall  be  appointed  by  them  not  exceeding  seven  for  the 
purpose   of  the  particular  negotiation. 

10.  Negotiations  under  this  agreement  may  be  instituted 
either  by  the  management  or  by  the  workmen  concerned. 

11.  The  recognition  of  shop  stewards  is  accorded  in  order 
that  a  further  safeguard  may  be  provided  against  disputes 
arising  between  the  employers  and  their  workpeople. 

12.  Any  questions  which  may  arise  out  of  the  operation  of 
this  agreement  shall  be  brought  before  the  executive  of  the 
trade  union  concerned  or  the  federation,  as  the  case  may  be. 

It  will  be  observed  that  recognition  was  given  to  shop 
stewards  chosen  by  the  unions.  Nevertheless,  the 
Coventry  idea  of  workers'  committees,  looking  towards 
One  Big  Union,  irrespective  of  crafts,  persisted  among  the 
shop  stewards  and  must  make  itself  felt  in  the  unions. 
It  is  to  be  noted,  in  addition,  that  the  agreement  of 
December  20,  1917,  was  brought  about  as  the  result  of  a 
conference  between  the  employers'  federation  and  the 
trade  unions;  that  is,  the  unions  obtained  help  from  the 
employers,  or  vice  versa,  in  measures  to  hold  the  extremists 
within  bounds;  but  in  doing  so  the  employers  gave 
ground. 

129 


In  effect,  what  has  to  be  reckoned  with  Is  not  merely 
shop  stewards  and  their  works  committees,  but  a  point 
of  view  represented  by  the  so-called  "Shop  Stewards' 
Movement,"  in  whatever  form  it  appears,  which  aims 
at  a  control  of  industry. 

Such  an  influence,  therefore,  varying  according  to  the 
strength  of  the  "rank  and  file"  within  the  unions,  will 
color  the  claims  and  action  of  works  committees.  Indeed, 
the  committees  formed  under  the  Whitley  plan  will  un- 
doubtedly have  to  face  these  influences  and  the  persistent 
claim  for  an  increasing  control  over  industry.  The  ques- 
tion is:  At  what  limit  of  control  will  the  demands  be 
satisfied.^  If  the  extremists  more  and  more  dominate 
the  labor  organizations,  their  radical  demands  will  in- 
crease; and  British  industry  will  be  marked  by  the  passing 
of  management  into  the  hands  of  those  who  have  con- 
tributed no  capital  to  the  enterprise.  The  issue  is  clearly 
joined.  At  what  limit  must  the  employer  make  a  stand 
and  refuse  further  concessions  in  the  interest  of  national 
efficiency  of  production.'* 

Committees,  or  stewards,  or  any  machinery  of  com- 
munication between  the  employers  and  workers,  are  not 
in  themselves  the  real  solution  of  labor  troubles.  The 
crux  of  the  matter  is,  what  policy,  what  objectives,  have 
the  workers  in  mind,  for  the  accomplishment  of  which 
the  machinery  of  committees,  stewards,  or  unions  are 
created.^  Radical  ideas,  if  they  get  in,  will  permeate 
general  thinking  on  labor,  just  as  dye  will  color  the  water 
in  any  cask,  no  matter  what  kind  of  a  cask  it  is.  As 
Mr.  Cole  has  said,^  the  Shop  Stewards'  Movement 

"provides  at  least  the  nucleus  oi  the  machinery  through 
which  trade  unionists  can  hope,  by  gradual  extension  of  their 
power,  to  assume  control  in  the  workshop." 

§  5.     Expansion  of  Functions  of  Shop  Stewards 

In  their  origin,  shop  stewards  began  as  trade  union 
delegates  to  watch  over  the  observance  of  union  rules 
regarding  the  details  of  workshop  conditions.  It  has 
been  learned  that  the  workers  can  exercise  control  over 
the  workshop  only  through  some  organization  within  the 
workshop.      The    original    shop    steward    was    a    repre- 

'  Cole,  G.  D.  II.:  "  The  New  Forces  in  British  Labor,"  The  Dial,  December  14, 
1918,  pp.  539-41. 

i;iO 


sentative  of  his  craft,  and  usually  a  skilled  craftsman. 
But  with  the  war  came  many  semi-skilled  and  unskilled 
workmen  into  the  shops  not  represented  by  the  former  type 
of  steward.  The  fundamental  idea  of  the  Shop  Steward 
Movement  is  an  amalgamation  into  one  union  of  all  the 
workers  of  a  given  industry,  irrespective  of  skill.  This 
jumps  with  the  larger  conception  of  One  Big  Union  of  all 
industries,  to  be  used,  if  necessary,  in  a  general  strike. 

It  was  the  technical  and  administrative  problems 
within  the  workshop,  mainly  connected  during  the  war 
with  the  conflict  of  interests  between  the  skilled  and  the 
unskilled  workers  due  to  the  introduction  of  automatic 
machinery  and  "dilution,"  which  brought  shop  stewards 
to  the  front.  Such  a  situation  raised  further  questions  as 
to  "payment  by  results"  and  basic  piece-rates.  Whatever 
general  agreements  were  made,  inevitably  there  would 
be  a  need  of  determining  their  local  application  in  the 
individual  workshop.  Hence  the  proposal  for  the  ap- 
pointment by  the  workers  of  a  separate  rate-fixer  to  adjust 
rates  with  the  rate-fixer  of  the  firm.^  Such  an  official, 
however,  under  whatever  name,  would  be  the  equivalent 
of  a  shop  steward. 

In  still  another  way  is  the  encroachment  on  manage- 
ment proposed  by  urging  the  selection  of  foremen  by 
the  workers  themselves.  Leaving  disciplinary  questions 
aside,  the  technical  duties  of  the  foreman  bring  him  into 
direct  contact  with  the  workers  and  their  shop  stewards. 
Most  employers  would  naturally  regard  the  selection  of 
foremen  as  an  essential  function  of  the  management. 
To  transfer  the  appointment  of  foremen  to  the  workers 
would  obviously  mean  —  to  quote  Mr.  Cole-  —  "that  the 
shop  stewards  shall  take  the  place  of  the  foremen  ap- 
pointed by  the  management." 

Where  employers  express  opposition  to  dealing  with 
shop  committees,  it  most  frequently  results  from  lack  of 
confidence  in  the  shop  stewards.  They  prefer  to  bargain 
with  long  established  officials  of  the  trade  unions  whose 
conservatism  is  a  surer  guarantee  of  the  permanent  char- 
acter of  the  agreement.  In  the  cotton  trade,  where  a  very 
elaborate  and  successful  system  of  collective  bargaining 
has  been  worked  out,  the  shop  steward  system  is  practi- 
cally non-existent  and  not  favored  at  all  by  cotton  mill 

1  Cf.  Sidney  Webb:  "The  Works  Manager  Today,"  pp.  55-102. 
•  The  Dial,  December  14,  1918. 

131 


operators.  The  secretary  of  the  Federation  of  English 
Cotton  Spinners  and  Manufacturers'  Associations  ex- 
pressed the  view  that  shop  stewards  in  other  industries 
are  usually  agitators,  who  work  contrary  to  the  policies 
of  the  union  officials.  Nearly  the  same  situation  exists 
in  the  Engineering  Employers'  Federation,  which  refuses 
to  recognize  unofficial  shop  stewards,  because  their 
labor  agreement  through  the  constitutional  leaders  of 
the  unions  is  precise  and  definite  in  its  machinery  for 
arbitration.  The  secretary  of  this  federation  spoke 
cordially  of  their  relations  with  the  trade  unions  and  was 
of  the  opinion  that  the  Shop  Steward  Movement  would 
"settle  down." 

This  statement  coincided  with  the  opinion  of  a  Scottish 
employer,  who  felt  that  the  shop  stewards  could  not 
break  down  conservative  trade  unionism.  He  said  that 
the  shop  stewards  had  made  many  efforts  to  obtain 
control  of  industry,  but  so  far  had  been  defeated  every 
time.  He  personally  differed  from  most  manufacturers 
in  the  country,  in  holding  that  the  worker's  pretensions 
should  be  fought.  He  would  not  compromise  with  them 
and  said  that  manufacturers  who  compromised  were 
yielding  on  principles  vital  to  industry.  He  believed 
the  ultimate  result  of  present  tendencies  would  be  a  con- 
siderable strike,  in  which  the  radicals  would  be  utterly 
broken. 

§  6.     Union  to  Absorb  Shop  Stewards 

In  frequent  instances,  however,  arrangements  have 
been  made  with  the  union  for  employers  to  treat  directly 
with  the  shop  stewards. 

The  director  of  production  in  a  small  arms  manufacturing 
establishment  said  that  there  had  been  shop  stewards  in  the 
works  for  many  years  but  they  were  not  recognized  by  the 
unions  until  two  or  three  years  ago,  when  the  unions  decided 
it  was  better  to  recognize  them  than  fight  them.  Originally 
the  shop  stewards  were  not  appointed  by  the  unions  but  had 
the  backing  of  the  men  in  the  shops.  The  shop  stewards  form- 
erly tried  to  get  concessions  by  unconstitutional  means;  later 
their  procedure  was  in  line  with  union  methods.  Their  early 
attempt  was  to  improve  their  position  by  getting  something 
for  the  workers  which  the  unions  could  not  get.  They  tried 
to  break  away  from  the  unions,  secure  all  the  funds  and  the 
authority.  These  attempts  were  more  successful,  the  director 
stated,  in  Londfui  than  in  the  l>irniin^'liam  district. 

132 


The  unions  recently  asked  this  company  to  recognize  the 
shop  stewards  in  order  that  they  might  become  a  link  in  the 
chain  of  unionization.  About  six  months  before  the  Com- 
mission's study  of  conditions,  the  company  agreed  to  handle 
labor  disputes  through  the  shop  stewards,  but  during  that  time 
the  latter  had  never  come  forward  with  any  proposition.  The 
manufacturers  require  that  the  stewards  shall  be  appointed 
by  the  unions.  A  man  with  a  grievance  now  goes  first  to  the 
shop  steward  for  redress;  and  the  stewards  handle  many  of 
the  personal  matters  satisfactorily. 

In  answer  to  a  question  as  to  the  advisability  of  the  shop 
committee  method  of  management,  the  director  stated  that  it 
might  be  all  right  if  the  functions  of  the  committee  were 
adequately  defined.  The  trouble  is  that  the  radicals  in  an 
organization  will  not  define  its  position.  Therefore  he  would 
advise  keeping  away  from  the  shop  committee  plan  as  long  as 
possible. 

The  representatives  of  an  engineering  firm  reported 
that  the  company  can  get  on  very  satisfactorily,  as  long 
as  they  negotiate  directly  with  the  unions,  but  the  shop 
stewards,  who  are  usually  young  men  or  agitators,  cause  all 
the  trouble.  Hence  they  are  trying  to  strengthen  the 
hands  of  the  union  leaders  and  to  hold  down  the  shop 
stewards.  They  also  related  the  experience  of  another 
establishment  manufacturing  range  finders  and  apparatus 
which  required  highly  skilled  workers.  The  employers 
have  done  everything  possible  for  the  men.  A  works 
committee  was  started,  but  it  was  captured  by  the  extrem- 
ists. They  presented  such  radical  demands  as  a  share  in 
the  management  and  profits.  Instead  of  helping  matters, 
the  works  committee  created  a  barrier  between  masters 
and  men. 

The  success  of  the  radicals  in  obtaining  control  in  this 
plant  corresponds  to  the  admission  by  a  government 
official  that  an  open  election  of  shop  committees  would 
probably  result  in  shop  stewards  of  the  Coventry  type 
being  elected.  Several  employers  indicated  that  they 
considered  shop  stewards  to  be  Bolshevistic.  An  expla- 
nation of  these  radical  tendencies  was  offered  by  the 
Assistant  Secretary  of  the  Chief  Industrial  Commissioner. 
He  claimed  that  the  general  educational  system  of  Great 
Britain  had  awakened  the  minds  of  some  men  of  great 
ability  in  the  working  class.  These  men  entered  trades 
and  after  a  few  years  found  themselves  facing  a  future 
that  offered  little  opportunity  for  their  advancement. 
Under   such   circumstances   they  grew   restless   and   dis- 

133 


contented,  and  speedily  became  leaders  of  revolt.  These 
were  the  men  who  gave  labor  its  intellectual  strength  and 
formed  the  shop  steward  movement. 

That  increased  power  in  the  hands  of  the  shop  stewards 
tends  to  disorganize  the  unions  was  the  opinion  of  the 
secretary  of  the  Iron  and  Steel  Trades  Association.  This 
organization  is  a  federation  of  three  unions  covering  38,000 
workpeople.  The  secretary  said  that  the  system  of 
organization  in  his  federation  offered  no  opportunity  for 
what  are  called  official  shop  stewards,  i.e.,  those  ap- 
pointed by  the  union.  Organizers  (whose  functions  are 
somewhat  similar  to  those  of  shop  stewards)  were 
appointed  by  the  executive  of  the  federation,  which  thus 
kept  a  check  on  men  who  were  their  local  agents.  On  the 
other  hand,  the  Amalgamated  Society  of  Engineers,  which 
had  long  had  official  shop  stewards,  had  less  central 
control  and  more  local  autonomy.  In  illustration  of 
the  effect  of  local  autonomy  the  secretary  said  that  the 
central  executive  of  the  A.  S.  E.  had  recently  obtained  an 
injunction  against  one  of  its  district  branches. 

This  view  as  to  the  present  disorganization  was  cor- 
roborated by  the  director  concerned  with  labor  in  one  of 
the  establishments  visited  by  the  Commission.  He 
regarded  the  "rank-and-file"  movement  as  the  most 
serious  aspect  of  the  situation.  Men  are  breaking  away 
from  the  restraints  and  agreements  of  their  stewards  as 
well  as  from  their  trade  union  delegates. 

The  following  account  of  an  interview  with  several 
shop  stewards  by  a  representative  of  the  Commission 
makes  clear  their  general  attitude,  plans,  and  hopes. 

Among  the  shop  stewards  present  was  one  who  had  been 
twice  imprisoned  under  the  Munitions  Act  for  inciting  men 
to  strike,  and  now  could  get  no  work  in  any  engineering  estab- 
lishment, and  was  devoting  his  time  to  propaganda.  At  this 
new  job  he  could  not  get  enough  to  live  upon,  and  was  com- 
pelled to  take  up  repairing  in  his  old  trade.  A  second  was  the 
chairman  of  the  local  shop  stewards'  committee,  while  the 
third  was  a  foreman  in  a  local  factory  that  had  arisen  during 
the  war,  where  most  of  the  men  present  were  employed,  and 
where  alone  in  Or^entry,  shop  stewards  received  recognition 
from  employers.  The  reasonableness  and  moderation  dis- 
played respectively  by  these  men  was  in  inverse  order  to  that 
in  which  they  have  been  named.  'I'he  two  former  shop 
stewards  had  been  in  America,  the  first  in  Chicago,  the 
second  in  Pittsburgh. 

134 


These  shop  stewards  were  all  loud  in  their  denunciation  of 
the  executive  officials  of  the  trade  unions.  The  men  them- 
selves were  each  trade  unionists  of  many  years'  standing,  and 
the  local  shop  stewards'  chairman  was  a  member  of  the  local 
executive  committee  of  the  A.  S.  E.  They  had  not  made  up 
their  minds  whether  the  right  course  for  the  movement  was 
to  work  from  within  the  trade  union  movement  and  alter  it 
by  evolutionary  methods,  or  seek  to  smash  it  by  revolution. 
They  held  that  trade  unionism  was  too  autocratic  to  be 
permitted  to  continue  as  at  present,  and  yet  feared  that  the 
masses  were  too  "apathetic"  to  support  revolutionary 
methods.  Their  protests  against  the  executive  officials  of 
their  union  (A.  S.  E.)  contained  the  following  counts: 

1.  The  officials  are  too  far  removed  from  local  conditions  and 
from  the  problems  of  the  workshop.  This  well-worn  com- 
plaint was  enunciated  in  all  Its  fullness. 

2.  The  officials  are  not  responsible  to  the  workers  for  their 
actions,  nor  do  they  consult  them  even  when  ostensibly 
fighting  their  cause.  Thus,  in  the  various  strikes  which 
had  occurred  at  Coventry,  the  executive  officials  were 
alleged  never  to  have  consulted  the  strikers  as  to  their 
grievances.  This  charge  probably  meant  that  they  had 
never  consulted  the  shop  stewards.  It  was  alleged, 
further,  that  the  officials  had  discussed  the  question  of  the 
dismissal  of  the  head  shop  steward  of  a  certain  firm  with 
the  employer,  although  the  man  in  question  had  never  been 
interviewed  on  the  matter  by  the  executive.  This  com- 
plaint was  given  as  first-hand  evidence  by  the  steward, who 
had  a  seat  on  the  local  executive  of  the  A.  S.  E.  There  is 
certainly  very  bad  blood  between  the  shop  stewards  and 
the  district  secretary  of  the  A.  S.  E.  The  latter  is  held 
responsible  for  the  failure  of  the  shop  stewards  to  get  the 
footing  they  sought. 

3.  The  officials  are  often  not  representative  of  the  workers. 
Thus,  the  president  of  the  local  executive  of  the  A.  S.  E. 
had  received  only  a  total  of  500  votes  at  his  election, 
although  the  town  contained  thousands  of  members  of  his 
craft. 

The  shop  stewards,  in  contradistinction,  seek  "democratic 
organization"  of  industry,  with  the  employees  in  the  work- 
shop as  the  ultimate  source  of  sovereignty.  They  hold  that 
workers'  committees  (shop  stewards)  should  be  elected  by  all 
the  workers  in  the  workshops,  without  regard  to  craft,  and  all 
questions  of  policy  and  action  should  be  referred  back  to  the 
rank  and  file  for  ratification.  A  local  dispute  arising,  the 
course  of  action  to  be  taken  would  be  decided  by  public 
discussion  of  all  the  employees  in  all  the  workshops,  who 
would  give  a  mandate  to  their  representatives,  the  shop 
stewards.    A  national  stoppage  would  be  decided  upon  in  the 

135 


same  way.     No  provision  exists  in  this  cumbrous  machinery 
for  settling  disputes. 

The  ultimate  end  of  the  shop  steward  movement  was  ac- 
knowledged to  be  that  of  obtaining  a  large  measure  of  control 
over  industry.  The  movement  seemed  to  its  supporters  the 
obvious  means  for  securing  such  control.  The  two  essential 
men  in  industrial  organization  whose  places  must  be  filled 
before  control  of  industry  by  the  workers  can  be  achieved  are 
the  foremen  and  the  rate-fixer.  The  shop  steward  is  obvi- 
ously the  rival  of,  and  in  the  minds  of  his  supporters  a  better 
man  than,  the  foreman.  In  matters  of  discipline  and  super- 
vision the  stewards,  in  shops  where  they  were  recognized, 
practically  reduced  the  foreman  to  the  position  of  a  looker-on. 
In  technical  matters,  many  shop  stewards  were  at  least 
equally  as  well  fitted  as  any  foreman  to  supervise  mechanical 
operations.  Speaking  generally,  whatever  the  shop  organiza- 
tion adopted,  the  steward  could  readily  and  effectively  replace 
the  foreman. 

In  the  establishments  where  they  worked,  and  where  the 
shop  stewards  had  a  large  voice  in  affairs,  the  time-rate  was 
the  fairly  low  one  of  two  shillings  and  six  pence  an  hour,  but 
there  were  many  men  whose  rates  were  equal  to  six  shillings 
an  hour.  This  was  in  a  new  firm  which  had  learned  that  it 
could  afford  high  wages  as  long  as  it  got  high  productivity.  If 
employers,  according  to  these  stewards,  could  learn  that 
lesson,  and  could  see  that  democratically  elected  shop 
stewards  could  be  as  efficient  as  the  present  foremen  and 
rate-fixers,  the  "control  of  industry"  demanded  by  the 
leaders  in  the  shop  steward  movement  would  be  beneficial  to 
everybody.  The  control  they  demanded  did  not  go  any 
further  than  above  defined.  Problems  of  buying  and  selling 
and  of  finance  were  beyond  the  dreams  or  the  capacities  of 
the  workers. 

The  workers  present  at  this  interview,  however,  were  very 
dubious  of  the  future  of  the  shop  steward  movement.  It  had 
been  defeated  in  Coventry,  and,  from  their  standpoint,  had  lost 
its  opportunity.  It  was  in  the  same  position  in  the  Clyde  and 
elsewhere  in  the  North.    It  had  no  footing  in  the  South  at  all. 

The  general  discussion  revealed  two  other  points: 
1.  The  chairman  of  the  Shop  Stewards'  Committee,  who  was 
Chief  Shop  Steward  in  the  establishment  where  he  worked, 
exercised  the  same  privilege  as  Kirkwood  claimed  at 
Glasgow,  in  March,  191G,  namely,  that  of  leaving  his  work 
(piecework)  at  any  time  to  go  around  the  factory  to  deal 
with  any  matter  covered  by  his  functions  as  a  shop 
steward.  This  privilege  was  never  challenged  by  any  one 
except  the  head  of  the  firm,  whose  challenge  consist.d 
merely  in  wanting  to  know  the  business  on  which  the  chief 
shop  steward  might  be  engaged  at  the  moment  of  meeting. 

136 


2.  The  "recognition"  granted  in  Coventry  in  December,  1917, 
was  not  the  sort  of  recognition  fought  for.  It  was  merely 
recognition  of  official  shop  stewards.  The  A.  S.  E., 
which  refused  to  sign  the  agreement  of  December  20, 
1917,  agreed  only  to  the  first  four  articles,  and  sought 
for  a  larger  sphere  for  the  shop  stewards.  What  the 
A.  S.  E.  sought  has  not  been  revealed  in  published  form, 
though  the  strained  relations  between  the  shop  stewards 
and  the  local  A.  S.  E.  lead  one  to  believe  that  its  aims 
would  not  be  identical  with  those  of   the  shop  stewards. 


137 


CHAPTER  VIII 
WORKS   COMMITTEES 

§  1.     Justification  of  Works  Committees  in  Their 
Simplest  Form 

A  means  of  communication  between  employers  and 
workers  is  a  practical  necessity;  matters  of  mutual  interest 
necessarily  arise  for  common  consideration.  There  must 
be,  moreover,  the  machinery  for  discussion  of  the  many 
questions  sure  to  develop  respecting  shop  practices, 
grievances,  wages,  hours,  and  the  like.  Hence  the  natural 
development  of  some  body  which  would  represent  the 
workers  in  conferences  with  the  managers  regarding 
affairs  in  the  shops.  This  need  arises  even  where  the 
employer  is  dealing  directly  with  his  own  men  without 
interference  from  outside  influences.  The  practical  situa- 
tion, however,  due  to  the  purpose  of  unions  to  impose 
general  rules  in  behalf  of  workmen  in  the  shop,  due  to 
the  rank-and-file  movement,  and  due  to  very  extreme 
demands  for  a  share  in  the  management,  calls  for  adjust- 
ment of  problems  of  a  complicated  character.  This 
makes  the  dealings  of  an  employer  with  his  workers  far 
from   simple. 

As  part  of  this  machinery  for  aiding  in  a  joint  under- 
standing great  reliance  has  been  placed  by  some  on  shop 
committees.  Sometimes  there  are  found  obstinate  em- 
ployers who  refuse  to  allow  any  interference  with  their 
self-devised  policies  in  regard  to  everything  relating  to 
the  management  of  the  shop.  Also,  there  are  employers 
who  can  establish  cordial  relations  with  the  men  in  their 
employ,  no  matter  how  numerous,  without  any  intervening 
body.  But,  in  the  main,  the  psychology  behind  works 
committees  is  found  in  the  very  human  tendency  to  have 
grievances  due  to  misunderstandings  or  through  distrust 
of  what  is  unknown.  Hence,  it  has  been  claimed  that 
real  friction  can  be  avoided  by  providing  a  means  for  the 
ventilation  of  grievances  in  the  stage  before  they  have 
become  acute.  Sometimes,  by  common  discussion  and 
mutual  exchange  of  information,  the  so-called  grievances 
may  be  slum'n  to  hv  unfounded  and  arc  disposed  of  before 

138 


they  take  on  any  importance.  If  all  employers  and  all 
workers  were  reasonable  and  fair-minded  the  matter 
might  be  left  at  this  point;  but  the  yeasting  of  unrest  is 
here;  new  demands  are  being  made,  and  control  of  industry 
is  being  claimed.  Under  these  circumstances  a  variety 
of  considerations  arise  to  be  discussed. 


§  2.     Kinds  of  Works  Committees 

Although  shop  stewards  have  long  existed  in  establish- 
ments as  the  watchers  for  their  unions,  shop  committees 
are  of  recent  origin,  being  mostly  the  outcome  of  war 
conditions.  Various  functions  have  been  assumed  by 
committees,  such  as  the  following: 

(1)  Social  Union  Committees,  which  are  made  up  from  the 
workers  for  the  furtherance  of  games,  recreation,  study- 
circles,  picnics,  and  the  like. 

(2)  Welfare  Committees,  which  deal  with  shop  conditions, 
such  as  ventilation,  dressing  and  wash  rooms,  sanitation, 
provision  for  heating  tea-cans,  canteens,  and  the  like. 

(3)  Industrial  Committees,  which  deal  with  work  conditions, 
hours,  piecework,  and  remuneration  of  labor  within  the 
works. 

For  our  investigation  we  were  concerned  primarily 
only  with  the  last  of  these  three  kinds.  It  was  urged, 
however,  that  industrial  committees,  which  are  engaged 
on  controversial  questions,  should  not  have  control  of 
welfare  and  social  activities,  because  they  are  likely  to 
develop  a  spirit  of  partisanship  which  is  alien  to  the 
spirit  of  harmony  and  good  fellowship.  The  relation  of 
employers  to  workers  on  vital  industrial  matters  appears 
in  connection  only  with  industrial  works  committees; 
and  the  functions  claimed  by  these  committees  vary 
with  their  make-up.  They  vary  from  matters  of  shop 
conditions  to  the  executive  control  of  the  industry;  and 
much  depends  on  whether  or  not  they  are  made  up  of  shop 
stewards  or  some  one  chosen  from  the  "rank  and  file." 
First,  we  may  take  up  the  cases  concerned  with  simple 
shop  questions,  with  no  jurisdiction  over  wages. 

It  is  apparent  that  the  successful  functioning  of  shop 
committees  under  these  conditions  must  be  in  large  part 
dependent  upon  the  attitude  of  management  and  men  in 
the  individual  establishment.  Where  the  disposition  to 
co-operate  already  exists,  conditions  will  be  favorable  to 

139 


such  a  system.  The  experience  of  a  large  electrical  manu- 
facturing firm,  which  itself  took  the  initiative  in  the 
installation  of  shop  committees,  is  enlightening  in  this 
connection : 

The  manager  of  the  works,  who  is  heartily  in  accord  with 
the  union  methods  of  handling  the  relations  between  em- 
ployers and  employees,  believes  firmly  in  the  shop  committee 
method.  He  is  continually  developing  and  strengthening 
the  committee  idea.  In  an  interview  with  members  of  the 
Commission  he  expressed  the  view  that,  with  tact,  broad- 
mindedness,  and  the  capacity  for  leadership,  a  works  manager 
can  get  far  better  results  from  his  organization  if  a  strong  shop 
committee  exists. 

In  closing  he  stated  that  employers  generally  in  England 
see  that  it  will  take  great  tact  and  integrity  to  restore  normal 
conditions.  During  the  war  these  employers  have  gone  a  long 
way  toward  appreciation  of  the  workmen's  side  of  the  case, 
and  he  believed  that  unless  there  were  an  explosion  in  the 
near  future,  a  proper  solution  of  the  problem  would  be  found. 

This  attitude  of  confidence  on  the  part  of  the  management 
is  evidently  to  a  considerable  degree  reciprocated  by  the  men. 
The  chairman  of  the  works  committee  in  this  establishment 
is  a  man  of  unusual  intelligence  and  character.  He  is  a  boring- 
mill  hand  and  a  pieceworker.  When  occupied  with  committee 
affairs  he  is  paid  on  a  day  basis.  Although  the  company 
would  be  glad  to  pay  him  three  or  four  times  his  present  wage 
if  he  would  take  a  position  as  foreman,  he  prefers  to  devote 
his  life  to  the  interests  of  the  workingmen,  which  he  handles 
in  a  very  intelligent  and  broadminded  manner.  He  came  to 
meet  the  Commission  in  his  overalls  and  with  his  hands 
covered  with  oil,  but  was  entirely  at  his  ease  in  discussing 
labor  matters.  Although  he  was  self-educated,  chiefly  by  use 
of  a  private  library  In  his  native  town,  he  used  the  best  of 
language.  He  Is  a  Socialist  and  a  member  of  the  Labour 
Party,  and  otherwise  an  advocate  of  advanced  ideas. 

Eventually,  he  said,  the  men  wish  to  have  representatives 
on  the  board  of  directors  of  the  company.  They  realized,  how- 
ever, that  the  time  had  not  yet  come  for  this.  He  claimed  that 
a  director  appointed  from  among  the  men  could  contribute 
more  than  many  of  the  present  directors,  who  usually  know 
very  little  about  the  business.  He  pointed  to  the  co-operative 
societies  as  evidence  of  the  managerial  ability  of  workmen. 
The  Co-operative  Wholesale  Society  does  a  business  of  a 
hundred  million  pounds  sterling  per  year. 

Through  all  his  conversation  the  chairman  of  the  works 
committee  showed  that  he  realized  the  necessity  to  the  com- 
pany of  making  a  profit  and  that  the  workers  must  produce 

140 


efficiently  to  accomplish  this.  If  shop  committees  could 
always  be  led  by  men  of  this  type,  there  would  be  no  question 
as  to  their  justification.  It  was  evident,  however,  that  only 
the  greatest  justness  and  steadiness  on  his  part  could  preserve 
his  standing  with  the  men.  They  were  already  suspicious  of 
him,  because  he  is  frequently  called  into  conference  in  the 
manager's  office.  While  the  company  would  gladly  pay  for  the 
time  he  has  to  spend  on  grievances,  he  cannot  accept  this,  as 
it  would  undermine  the  confidence  of  the  men. 

The  Commission  obtained  considerable  information  regard- 
ing the  organization  of  the  works  committee  by  this  company. 
It  was  formed  at  the  end  of  January,  1917.  Each  shop  and 
department  has  an  elected  representative,  from  whom  in  turn 
the  members  of  the  works  committee,  fifteen  in  number,  are 
selected.  They  meet  in  conference  with  two  representatives 
of  the  management,  one  of  these  being  the  works  manager 
himself.  Although  officially  he  has  only  one  vote  and  only 
the  same  privileges  as  the  rest  of  the  committee,  his  position 
gives  him  more  weight  than  any  other  member.  Through  the 
full  weekly  record  of  the  proceedings,  the  management  is  kept 
informed  of  all  differences  or  grievances  expressed  in  the 
committee.  As  the  management  discovered  that  it  might  be 
advantageous  to  bring  the  superintendents  and  foremen  into 
closer  touch  with  these  problems,  it  was  later  arranged  that 
superintendents  in  turn  should  attend  the  weekly  meetings, 
while  foremen  are  represented  by  a  delegate  from  the  fore- 
men's association. 

Problems  handled  by  the  works  committee  are  of  mutual 
interest  to  management  and  men.  Among  those  considered 
are  apprentice  training,  ventilation  of  canteens,  traveling 
facilities,  and  similar  questions.  A  matter  which  has  caused 
friction  between  foremen  and  men  is  the  submission  of 
patentable  ideas.  Works  committees  have  assisted  the 
management  to  know  more  about  those  trifling  vexations 
which  nevertheless  hinder  production,  lower  efficiency,  or 
ultimately  lead  to  strikes.  Indeed,  one  of  the  most  important 
functions  of  the  committee  is  the  consideration  of  individual 
complaints.  Its  effectiveness  in  this  respect  is  demonstrated 
by  the  fact  that  it  has  settled  ninety  per  cent  of  the  griev- 
ances. The  subject  of  wages  is  not  under  the  jurisdiction  of 
the  committee. 

A  representative  of  the  company  gave  a  specific  instance 
to  show  how  intelligent  shop  committees  can  get  at  facts  and 
comprehend  economics.  As  the  company  had  found  it  could 
buy  iron  castings  more  cheaply  than  it  was  producing  them, 
it  considered  closing  its  own  foundry.  The  shop  committee 
was  called  in  for  a  conference  and  the  situation  explained  to 
its  members.  They  were  told  that,  inasmuch  as  a  decision  to 
close  the  foundry  would  throw  a  considerable  number  of  men 

141 


out  of  employment,  the  management  thought  the  workmen 
should  understand  the  circumstance  and  give  the  manage- 
ment the  benefit  of  any  suggestions.  The  committee  quickly 
put  its  finger  on  the  weak  spot  in  the  situation.  They  in- 
vestigated conditions  at  the  foundry  from  which  the  castings 
were  to  be  bought  and  found  that  higher  piece-rates  were  being 
paid  there  than  in  the  company's  own  foundry.  The  differ- 
ence in  cost  was  not  due  to  the  direct  labor  costs  but  to  the 
overhead  expense  involved  in  the  maintenance  by  the  com- 
pany of  an  expensive  selling  organization  with  offices  in 
various  cities,  a  staff  for  development  work  and  other  large 
general  expenses  not  necessary  in  a  foundry.  It  was  this  large 
overhead  expense,  spread  over  the  foundry  as  well  as  the 
other  departments  of  the  business,  which  produced  the 
apparently  high  cost  of  castings. 

In  other  cases  where  works  committees  have  been 
successfully  inaugurated,  it  appeared  that  there  had 
already  been  a  long  record  of  successful  dealing  with 
employees.  The  Builders'  Federation,  which  believes  in 
works  committees  as  a  means  of  redressing  grievances 
and  securing  peace  and  quiet  in  the  trade,  had  already 
formulated  a  plan  of  its  own  prior  to  the  adoption  of  the 
Whitley  scheme. 

A  firm  which  has  an  international  reputation  for  its  welfare 
work  has  a  works  council  consisting  of  sixty  members.  The 
unusual  size  of  this  committee  Is  due  to  the  Insistence  of  the 
workers  that  every  department  of  the  works  be  represented. 
This  large  council  represents  only  one  per  cent  of  the  total 
employees.  Although  the  management  declined  to  allow 
election  of  foremen  by  the  works  committee,  it  does  submit 
the  name  of  a  proposed  foreman  for  discussion  and  criticism, 
final  voice  being  reserved  to  the  directors. 

No  foreman  has  the  absolute  right  of  discharge,  but  his 
proposal  must  be  endorsed  by  the  board  of  directors.  Even 
then  the  man  has  the  right  to  put  his  case  before  the  works 
council  or  the  trade  unions  for  review.  This  practice  corre- 
sponds to  the  demand  of  a  radical  British  labor  man  that  the 
employer  be  required  to  demonstrate  before  a  committee  of 
workers  his  reason  for  discharging  an  employee.  This  speaker 
claimed  that  the  workers  do  not  want  anything  to  do  with 
technical  or  commercial  aspects  of  business,  but  to  have  a 
voice  in  the  conditions  under  which  they  worked.  Tt  is  to  be 
noted  that  this  does  not  correspond  to  the  ultimate  demands 
cited  above  as  expressed  by  the  chairman  of  a  works  com- 
mittee. 

Another  question  submitted  to  the  works  committee  is  the 
allocation  of  hours,  their  number  being  determined  by  the 

142 


management.  Other  matters  which  have  come  before  the 
committee  of  this  firm  are  the  yearly  holiday  and  means  of 
securing  co-operative  enjoyment  of  it,  the  hospital  work  at 
the  establishment,  libraries,  and  the  place  of  the  administrative 
staff  on  the  council. 

The  general  tendency  in  organized  trades  is  for  shop 
stewards  to  be  elected  to  the  shop  committee.  In  the 
view  of  one  government  official,  works  committees  should 
be  composed  of  the  official  shop  stewards,  that  is,  those 
recognized  and  endorsed  by  the  trade  unions.  In  any 
case,  the  members  of  these  committees  would  be  trade 
union  representatives.  It  would  seem  preferable  that 
each  union  in  a  shop,  provided  it  were  reasonably  strong, 
should  have  a  representative  in  the  works  committee. 
Such  representatives  would  under  normal  circumstances 
be  the  shop  stewards  who  are  the  officially  accredited 
representatives  of  the  unions  in  the  shops.  It  was 
pointed  out  that  in  such  a  case  the  shop  steward  would 
be  only  indirectly  elected  by  his  fellows  and  the  question 
was  asked,  what  would  be  likely  to  happen  in  case  of  an 
open  election  of  representatives  to  the  shop  committee.^ 
It  was  admitted  that  unofficial  shop  stewards  of  the 
Glasgow  and  Coventry  type,  of  the  rank-and-file  move- 
ment, would  be  likely  to  be  elected,  and  the  matter  would 
then  become  an  internal  one  for  the  trade  unions.  The 
official  view  seemed  to  be  that  recognition  of  the  trade 
unions  entailed  the  co-ordination  of  the  shop  stewards 
with  the  works  committee  system: 

In  a  manufacturing  establishment  widely  known  for  its 
satisfactory  labor  conditions,  shop  stewards  elected  by  the 
workers  and  endorsed  by  the  trade  unions  are  recognized  by 
the  firm.  Complaints  on  trade  union  points  are  heard  through 
the  shop  stewards,  but  they  have  intimated  to  the  firm  that 
"not  one  tenth  of  the  complaints  they  hear  are  ever  brought 
to  the  management." 

In  the  woolen  and  worsted  trades,  according  to  the 
secretary  of  their  association,  works  committees  have 
not  yet  arisen.  Shop  stewards,  meaning  trade  union 
representatives  of  the  men  in  particular  occupations  and 
mills,  do  exist  and  are  more  or  less  semi-officially  recog- 
nized. 

The  works  manager  of  one  company,  which  has  had  no 
strikes  during  the  war  and  only  one  strike  in  twelve  years, 
stated  that  a  very  considerable  portion  of  his  time  is  occupied 

143 


In  meeting  committees  and  in  handling  labor  questions  in 
their  plant.  When  a  committee  is  called  into  conference  by 
the  company,  their  time  is  paid  by  the  company  at  the  estab- 
lished day  rates,  but  when  the  committee  calls  the  meeting  its 
members  lose  their  time. 

In  this  case  the  committees  are  elected  in  the  association 
rooms  of  the  unions  and  are  made  up  of  the  shop  stewards 
selected  by  the  different  unions.  While  the  shop  stewards,  as 
such,  represent  the  particular  unions,  the  shop  committee 
represents  the  employees  of  the  entire  plant.  The  works 
manager  said  that  not  more  than  twenty-five  per  cent  of  the 
men  attend  an  election,  largely  because  British  workmen  are 
lethargic  and  follow  the  self-appointed  leaders.  Neverthe- 
less, the  committees  are  fairly  representative,  as  they  are 
composed  of  men  who  can  formulate  and  express  opinions 
most  clearly.  A  secret  ballot  on  the  company's  premises 
would  not  make  any  material  difference  in  the  personnel  of 
the  committees. 

The  works  manager  of  an  establishment  manufacturing  lace 
nets  gave  an  account  of  the  firm's  experience  with  works 
committees  to  a  member  of  the  Commission.  This  factory  is 
situated  in  an  agricultural  district  where  there  is  no  labor  com- 
petition. The  workpeople  possess  high  technical  skill  and 
moral  character.  Prior  to  the  war  they  had  no  union  affilia- 
tions. To  secure  some  means  of  making  their  representations 
to  the  management,  a  works  committee  was  inaugurated  many 
years  ago.  Elected  representatives  of  the  workers  met  the 
management  regularly  or  when  some  special  occasion  arose. 
No  attempt  was  made  to  give  the  management  equal  repre- 
sentation. The  works  manager  met  the  committee,  calling 
in  any  foreman  or  superintendent  who  might  be  concerned 
in  the  matter  in  dispute.  In  the  opinion  of  the  works  manager 
this  system  was  a  great  success.  There  had  never  been  a  strike 
in  the  works,  and  the  management  never  made  any  changes 
in  wages,  methods  of  wage  payments,  hours  of  labor,  condi- 
tions, etc.,  without  first  acquainting  the  works  committee  of 
its  intention  and  working  out  a  plan  agreeable  to  both  parties. 
Since  the  formation  of  the  Whitley  Council  in  the  industry, 
as  the  workers  realized  that  they  had  no  voice  in  the  Council, 
being  unorganized,  a  fair  proportion  of  them  had  joined  the 
union. 

While  the  isolated  situation  of  this  factory  gave  it 
rather  unusual  opportunities  to  work  out  its  labor  pro- 
blems on  a  satisfactory  basis,  its  experience  goes  far  to 
show  how  much  depends  upon  the  spirit  of  both  the  work- 
ers and  the  management.  In  the  absence  of  outside  pres- 
sure, the  workers  would  probably  have  continued  unor- 

144 


ganized,  so  far  as  trade  union  affiliations  were  concerned. 
This  situation,  however,  was  evidently  based  upon  mutual 
respect  and  fair  dealing. 

A  clear  distinction  should  be  maintained  between  the 
shop  committee  and  the  shop  stewards.  As  already 
stated,  the  shop  committee  is  often  chiefly  or  wholly 
composed  of  shop  stewards.  But,  in  general,  the  shop 
steward  was  a  recognized  trade  union  official  elected  by 
his  shopmates  authorized  to  perform  certain  functions 
in  the  particular  plant,  long  before  shop  committees  came 
into  existence.  During  the  war,  however,  these  shop 
stewards,  whose  chief  duties  were  originally  the  collection 
of  union  dues  and  the  enforcement  of  union  rules,  came  to 
be  more  and  more  the  representatives  of  the  workers  to 
the  management,  even  to  the  point  of  usurping  the  func- 
tions of  trade  union  officials  empowered  to  deal  with 
employers.  This  growing  power  of  the  shop  stewards, 
together  with  their  radical  tendencies,  as  demonstrated 
at  Coventry  and  elsewhere,  has  aroused  very  considerable 
friction  within  many  of  the  unions. 


§  3.     Committees  as  Machinery  for   Settling 
Differences 

It  must  be  obvious  that  very  much  depends  upon  the 
functions  and  policies  assigned  to,  or  assumed  by,  a  works 
committee.  In  itself  a  committee  means  little;  the  pur- 
pose and  spirit  which  animate  it  mean  a  great  deal.  A 
committee  dominated  by  men  representing  the  workers 
in  a  non-union  shop  and  dealing  directly  with  an  employer 
is  one  thing;  a  committee  representing  the  policies  of  the 
established  labor  unions  is  another;  and  a  committee 
composed  of  shop  stewards  representing  the  rank-and- 
file  movement  is  still  another.  Therefore  no  general 
statement  about  the  desirability  of  creating  works 
committees  can  be  made.  In  themselves  they  are  no 
remedy  for  discontent.  What  really  matters  is  that, 
under  existing  conditions  of  unrest,  the  demands  of  labor 
are  so  extreme  that  they  cannot  be  granted  without  the 
destruction  of  industry. 

It  is  the  point  of  view  rather  than  the  machinery  of 
joint  discussion  through  which  such  views  are  conveyed 
which  is  pivotal.  If  committees  come  determined  to 
ask   for   control   of   industry   and   nationalization,   labor 

145 


troubles  are  not  settled  by  discussion.  The  methods  of 
the  Triple  Alliance  are  a  sufficient  illustration  of  this 
statement.  It  shows  a  rather  naive  state  of  mind  to 
assume  in  these  days  that  works  committees  are  a  cure-all. 
There  is  no  remedy  but  such  an  education  in  economics 
as  will  make  clear  to  laborers  and  to  the  people  in  general 
that  certain  demands  now  urgently  pressed  by  labor 
leaders  aim  directly  at  the  loss  of  national  prosperity. 
Committees  in  themselves  are  merely  the  machinery 
through  which  conflicting  claims  are  presented. 

§  4.     Shop  Stewards  on  Committees 

We  have  previously  given  testimony  regarding  com- 
mittees exercising  simple  functions  with  no  control  over 
wages.  They  gradually,  however,  take  on  additional 
powers.  The  shop  stewards  found  opportunity  for 
activity  on  committees  for  the  arrangement  of  piece- 
rates,  especially  on  new  work  which  was  not  covered  by 
the  shop  "log,"  or  list  of  piece-rates  that  had  been  estab- 
lished by  previous  negotiations  between  employers  and 
trade  unions.  From  time  to  time  new  functions  were 
assumed. 

During  the  war,  when  the  Government  controlled  in- 
dustries, some  experience  was  had  with  local  joint  com- 
mittees of  employers  and  employees.  But  this  experience 
bears  rather  on  the  weakness  of  governmental  manage- 
ment than  on  the  value  of  committees.  Early  in  the  war 
such  local  committees  had  been  organized  In  a  number  of 
places.  After  the  Munitions  of  War  Act,  1915,  the 
Departmental  Labor  officers,  under  the  bureaucratic 
Impulse,  assumed  greater  power  for  themselves.  To 
this  both  employers  and  workmen  objected  and  urged 
the  return  to  local  committees.  An  agreement  was 
reached  In  February,  1916,  on  which  the  labor  comment^ 
was  as  follows: 

"The  whole  question  of  Local  Joint  Committees  has  been 
remitted  to  the  Ministry  of  Munitions.  It  has,  however,  been 
remitted  under  certain  guarantees:  (i)  Local  Committees 
arc  to  be  established  in  every  area;  (ii)  on  these  Local  Com- 
mittees the  engineering  unions  are  to  elect  the  workers' 
representative;  (iii)  the  Local  Committees  are  to  be  em- 
powered to  act  as  initial  courts;  (iv)  before  them  are  to 
come  cases  that  may  lead  to  serious  difficulties,  and  they  are 

'  The  Ilrrald,  a  radical  labor  weekly,  edited  by  George  Lansbury. 

146 


to  have  power  to  settle  them;  these  local  courts  are  to  have 
power  to  issue  leaving  certificates,  and  thus  to  take  from  the 
Munitions  Tribunals  their  main  and  irritating  function." 

That  is,  the  war  led  to  arrangements  by  which  new 
powers  were  taken  over  by  joint  committees.  These 
local  committees  were  introduced  in  various  munition 
areas  of  the  metal  industries.  Likewise,  under  some  of 
the  Control  Boards,  notably  the  Cotton  Control  Board 
and  the  Department  of  the  Coal  Controller  (both  under 
the  Board  of  Trade)  joint  committees  were  established. 

As  an  example  of  how  an  extension  of  privileges  is 
seized  upon  by  existing  committees,  the  case'  of  Sir  William 
Beardmore  &  Company,  of  Glasgow,  may  be  cited :  As  the 
result  of  dilution,  the  following  were  the  first  articles  of 
an  agreement  reached  in  March,  1916: 

Section  1.  That  the  income  of  the  new  class  of  labor  be 
fixed,  not  on  the  sex,  previous  training,  or  experience  of  the 
workers,  but  on  the  amount  of  work  performed,  every  effort 
being  made  to  secure  the  maximum  of  output. 

Section  2.  That  a  committee  appointed  by  the  skilled 
workers  be  accepted  by  the  employers  with  power  to  see  that 
this  arrangement  (respecting  rates  of  wages  for  "the  new  class 
of  labor")  is  loyally  carried  out.  Failing  agreement  between 
employers  and  committee,  the  matter  to  be  referred  to  a  final 
tribunal,  mutually  arranged,  or,  failing  agreement,  appointed 
by  the  Board  of  Trade. 

Soon  after  this  agreement  had  been  made  a  strike  broke 
out  at  the  Parkhead  Works,  the  origin  of  which  was  thus 
explained  by  Dr.  Christopher  Addison,  then  Parliamentary 
Secretary  to  the  Office  of  Munitions,  to  the  Commons, 
March  28,  1916: 

''The  present  series  of  strikes  commenced  on  March  17th, 
when  one  of  the  members  of  this  committee  (the  Clyde  Work- 
ers' Committee)  insisted  that  he  should  be  entitled  during 
working  hours,  without  the  permission  of  the  management, 
to  leave  his  work  in  his  own  department  for  the  purpose  of 
investigating  what  was  being  done  with  unskilled  labor, 
interviewing  the  women  introduced,  and  examining  into  their 
rate  of  wages  and  other  matters.  The  management,  whilst 
offering  to  afford  the  men  all  reasonable  facilities  for  this 
purpose,  felt  themselves  unable  to  accede  to  his  request  and 
referred  the  matter  to  the  Clyde  Commissioners.     The  man 

^  The  Engineer,  March  3,  1916. 

147 


in  question  (one  Kirkwood),  however,  and  his  associates 
declined,  in  breach  of  their  own  agreement,  to  place  the  matter 
before  the  Commissioners  and  succeeded  in  bringing  out 
about  one  thousand  men  in  these  works." 

In  effect,  the  skilled  workers  had  chosen  their  convener 
and  his  associated  shop  stewards  as  the  committee  under 
Section  2  of  the  Agreement,  men  who  represented  the 
"rank  and  file."  Whereupon  the  Amalgamated  Society 
of  Engineers  repudiated  the  strike  as  unauthorized  by 
their  union;  but  the  strike,  which  was  really  for  the  recog- 
nition of  the  Shop  Steward  Movement,  went  on.  Some 
of  the  leaders  of  the  workers'  committee,  among  whom 
was  Kirkwood,  were  arrested  and  deported.  Finally, 
the  men  returned  to  work,  but  in  the  end  the  shop 
stewards  forced  the  unions  to  regularize  them. 

In  one  establishment  your  Commission  found  that  a 
works  committee  had  been  started  but  that  it  had  been 
captured  by  the  extremists.  They  insisted  on  a  share 
in  the  management  and  a  share  of  profits,  submitting 
demands  which  were  absolutely  impossible.  Instead  of 
helping  to  bring  about  a  satisfactory  relation,  the  works 
committee  created  a  barrier  between  the  employers  and 
their  workers.  There  was  a  tremendous  strike  in  1918. 
A  bad  situation  was  created  which  will  require  a  long 
period  of  time  to  overcome. 

As  an  example  of  still  further  encroachment  on  the 
functions  of  the  management  by  works  committees  is  the 
proposal  of  the  "collective  contract,"  by  which  the 
workers  assume  the  whole  work  of  production  throughout 
the  establishment.'  The  Paisley  Trades  and  Labour 
Council   suggested   that   a   works   committee   should   act 

as  the  sole  medium  of  contact  between  the  firm  and  the 
workers,  and  to  exercise  full  bargaining  powers  on  behalf  of  the 
men  and  women  in  the  department  in  fixing  time  allowance 
where  the  premium  bonus  operates,  and  rates  where  piece- 
work obtains.  Individual  bargaining  disappears;  collective 
contract  supplants  it. 

Under  such  a  system  the  workers  would  do  a  piece  of 
work  in  their  own  way,  under  foremen  and  supervisors 
appointed  by  themselves.  The  employer's  foreman  would 
then  be  only  the  agent  of  the  employer,  inspecting  and 

'  S.  G.  Ilobson:   '"rhe  Collective  Contract,"  The  New  Age,  August  29,  1918. 

148 


accepting  the  work  of  the  contracting  group  of  workers. 
Matters  of  discipline  would  pass  into  the  hands  of  the 
works  committee,  elected  by  all  the  trade  unionists  or 
all  the  workers. 

When  the  Whitehead  Torpedo  Works,  Ltd.,  proposed  a 
Joint  Council,  after  the  suggestion  of  the  Whitley  Com- 
mittee in  1918,  the  workers  responded  by  offering  the 
plan  of  a  "collective  contract."  Individual  piecework 
would  be  abolished.  The  works  committee,  fully  repre- 
sentative of  the  different  trade  unions,  would  take  the 
contract,  hire  the  workmen,  regulate  the  hours  of  work, 
and  supervise  apprentices  and  their  vocational  training. 
This  scheme  was  claimed  to  be  only  a  short  step  along  the 
road  to  Industrial  democracy,  since  there  would  still  re- 
main the  "Iniquitous  wage  system,"  together  with  the  con- 
trol of  capital  and  Industry  by  the  capitalist;  "that  even 
a  small  share  in  control  brings  the  power  to  restore  the 
defensive  position  and  make  it  stronger." 


§  5.     Functions  of  Committees 

The  functions  of  a  simple  works  committee,  working 
in  connection  with  the  Individual  employers  include, 
perhaps,  (a)  the  inquiry  into  grievances  reported  by  the 
workmen;  (b)  the  discussion  with  the  management  of 
those  it  considered  genuine;  (c)  consideration  of  com- 
plaints about  wages  and  piece-rates  affecting  individuals; 
(d)  examination  of  questions  relating  to  the  health  and 
safety  of  the  workmen;  (e)  consultation  with  the  manage- 
ment on  awards,  orders, and  circulars;  and  (/")  a  considera- 
tion generally  of  conditions  of  work  in  the  shop.  Such 
committees  are  usually  made  up  only  of  workers,  and  are 
distinct  from  joint  councils  formed  from  both  employers 
and  employees. 

We  have  seen,  however,  that  works  committees  may 
extend  their  functions  far  beyond  those  of  the  type  just 
mentioned;  that  is,  everything  depends  on  the  state  of 
mind  in  those  who  elect  and  form  these  committees.  A 
useful  piece  of  machinery  may  be  turned  into  a  revolu- 
tionary instrument. 

As  regards  the  theory  that  industrial  unrest  can  be  re- 
moved by  the  creation  of  machinery  for  joint  discussion, 
it  is  to  be  observed  that  the  success  of  such  proposals 

149 


depends  on  the  assumption  that  a  spirit  of  fairness  and 
good  will  already  exists  on  both  sides.  The  testimony 
given  above  shows  that  in  the  discontent  of  today,  such  an 
assumption  cannot  be  taken  for  granted.  In  very  truth, 
the  main  thing  to  be  kept  in  mind  is  not  the  mere  ma- 
chinery for  discussion,  but  whether  the  new  demands  are 
in  their  nature  such  as  can  be  granted  without  weakening 
industry. 


1.50 


CHAPTER  IX 
EIGHT-HOUR  DAY 

§  1.     Great  Britain 

The  weekly  hours  of  employment  in  Great  Britain  prior 
to  the  war  centered  somewhere  around  the  figure  54.  An 
investigation  made  by  the  Board  of  Trade  in  1906  showed 
that  the  average  hours  in  a  full  week  In  the  textile  Industry 
were  somewhere  near  55;  in  the  clothing  trades  —  that 
Is,  clothing,  boots  and  shoes,  hats,  gloves,  and  even  In 
laundries  —  It  was  from  50  to  54  hours. 

These  hours  prevailed  at  the  outbreak  of  the  war,  and, 
where  not  increased  by  the  pressure  for  munitions,  con- 
tinued until  the  end.  Thus,  after  the  armistice,  hours  are 
reported  as  follows  in  specified  trades:  textiles,  both  wool 
and  cotton,  553''2  hours  per  week;  engineering  trades,  54, 
and  even  58,  per  week;  boot  and  shoe  operatives,  52^/2 
hours  per  week.  It  may  be  stated,  therefore,  that  the 
average  weekly  hours  in  British  Industry  up  to  the  close 
of  the  war  was  about  54. 

Legislative  efforts  to  reduce  hours  date  far  back,  but  are 
found  In  most  recent  form  In  the  Factory  and  Workshop 
Act,  1901,  which  applies  to  the  labor  of  women,  and  boys 
and  girls  between  thirteen  and  eighteen  years  of  age. 
The  restrictions  imposed  by  this  act,  summarized,  are 
as  follows: 

(1)  The  maximum  weekly  hours  for  such  persons  was  60. 

(2)  Sunday  labor  was  forbidden. 

(3)  Night  work  was  forbidden  for  women  and  girls,  but 
was  allowed  for  boys  over  fourteen  years  of  age  in  such 
trades  as  blast  furnaces  and  iron  mills. 

(4)  No  woman,  boy,  or  girl,  could  be  employed  continuously 
for  more  than  5  hours  without  a  meal  interval  of  at 
least  one-half  hour. 

(5)  Women,  but  not  boys  and  girls,  might  be  employed  in 
certain  industries  for  two  hours'  overtime  beyond  the 
ordinary  daily  hours  (which  were  not  to  exceed  10/^)  on 
any  day  except  Saturday,  but  not  for  more  than  three 
days  in  any  one  week,  or  30  days  in  any  one  year. 

151 


No  restrictions  were  placed  upon  the  hours  of  employ- 
ment of  men. 

Though  the  legal  hours  of  employment  of  women  and 
young  persons  were  as  high  as  60,  in  actual  practice  the 
weekly  hours  prior  to  the  war  were  substantially  below  the 
limits  stated.  This  was  partly  due  to  the  action  of  em- 
ployers, and  partly  to  the  action  of  trade  unions  which 
had  forced  shorter  hours  for  males,  thus  automatically 
reducing  the  hours  for  women  below  the  legal  limit. 

The  war  produced  an  important  extension  of  the  hours 
of  labor.  The  Health  of  Munition  Workers  Committee 
(1918)  in  its  Final  Report  states  the  position  thus:^ 

At  a  very  early  stage  of  the  war  the  ordinary  restrictions 
on  hours  of  employment  were  widely  relaxed.  Sunday  labor, 
previously  forbidden  for  women  and  young  persons,  and 
practically  unknown  for  men  save  in  a  few  continuous  pro- 
cesses, became  common.  Night  employment,  which  for  fifty 
years  had  been  abolished  entirely  for  women  and  in  the  main 
for  boys,  became  regular.  The  strain  of  these  hours,  in  itself 
severe,  was  increased  through  large  numbers  of  men  and 
women  taken  into  employment  being  unaccustomed  to  such 
labor,  or  being  physically  less  able  to  bear  the  strain  than  the 
selected  body  of  laborers  previously  employed.  .  .  .  The 
employment  of  men  for  70  to  90  hours  a  week  was  common, 
for  over  90  hours  was  not  infrequent,  and  there  were  even 
cases  of  hours  in  excess  of  100.  The  highly  skilled  workers 
(tool  and  gaugemakers,  tool-setters,  etc.),  were  generally 
the  most  difficult  to  obtain  and  were  thus  most  frequently 
employed  for  long  hours. 

These  abnormally  long  hours  were  purely  a  war-time 
measure,  and  in  those  circumstances,  it  is  significant  to 
examine  the  grounds  on  which  they  were  adopted.  These 
grounds  are  stated  in  the  Report  thus:^ 

1.  The  dearth  of  workers  and  other  causes  prevented  any 
general  adoption  of  the  shift  system. 

2.  The  demand  for  output  was  urgent  and  immediate,  and 
had  to  be  met  even  at  some  risk  of  future  breakdown. 

.3.  Patriotism  introduced  a  new  incentive  which  rendered 
unreliable  all  previous  experience  as  to  the  number  of 
hours  which  could  be  successfully  worked. 

4.  Even  though  the  rate  of  output  might  be  reduced,  and  the 
cost  of  working  increased,  these  long  hours  did  result  in  a 
larger  output  than  short  hours  would  have  done. 

•  "  Health  of  Munition  Workers'  Committee,  Final  Report,"  p.  30. 
»  Ibid.,  p.  30. 

152 


The  maximum  hours  worked  by  women  is  suggested  in  a 
General  Order  from  the  Home  Office  in  September,  1915, 
by  which  women  and  boys  and  girls  over  sixteen  were 
allowed  to  work  673/2  hours  a  week.  But  overtime  was 
allowed,  so  that  in  special  cases  women  employed  as 
munition  workers  toiled  for  70  to  80  hours  a  week. 

As  the  strain  of  the  war  is  responsible  for  some  con- 
siderable part  of  the  existing  situation,  it  is  significant,  in 
considering  the  question  of  hours  of  work,  to  note  the 
effect  of  the  long  hours  worked  under  national  stress.  The 
Committee  on  Health  of  Munition  Workers  stated  the 
"serious  objections"  to  these  long  hours,  based  on  certain 
physiological  and  psychological  results:^ 

1.  They  [long  hours]  are  liable  to  impose  too  severe  a  strain 
on  the  workers. 

2.  A  large  proportion  of  the  hours  gained  may  be  lost 
through  broken  time;  the  workers  become  exhausted 
and  take  a  rest;  sickness  tends  to  increase,  at  any  rate 
among  the  older  men  and  those  of  a  weak  constitution. 

3.  They  lead  to  an  undue  curtailment  of  the  periods  of  rest 
and  sleep  available  for  those  who  have  to  travel  long 
distances  to  and  from  their  work. 

4.  The  fatigue  entailed  increases  the  temptations  of  men  to 
indulge  in  the  consumption  of  alcohol.  They  are  too  tired 
to  eat,  and  therefore  seek  a  "stimulant." 

By  January,  1916,  it  was  clear  that  hours  should  be 
reduced.  In  that  month  the  Health  of  Munition  Workers' 
Committee  suggested  that  the  average  weekly  hours  of 
employment  for  men  should  not  exceed  65  to  67,  exclusive 
of  mealtimes,  spread  over  a  13  or  14  hour  working-day;  that 
boys  under  sixteen  should  be  limited  to  60  hours  per  week, 
and  forbidden  to  work  at  night;  and  that  employment  for 
women  and  girls  should  be  limited  to  60  hours.  In  a 
general  order  from  the  Home  Office  in  September,  1916, 
the  hours  for  women,  boys,  and  girls  were  reduced  to  some- 
thing approximating  the  recommendations  of  the  com- 
mittee. There  was  also  a  somewhat  general  reduction  in 
hours  in  munition  establishments,  thus  reducing  the  hours 
of  men.  Nevertheless,  the  Health  of  Munition  Workers' 
Committee,  in  its  Final  Report  (April,  1918),  advocated 
that  hours  of  work   should   be  further  reduced.     Their 

^"Health  of  Munition  Workers'  Committee,  Final  Report,"  p.  30. 

153 


conclusions,  which  are  of  interest  because  of  the  various 
factors  taken  into  account,  follow:^ 

1.  The  scientific  data  collected  for  the  committee  and  the 
experience  gained  during  the  past  two  years  combine  to 
support  the  view  that  the  length  of  hours  of  employment 
provisionally  recommended  two  years  ago  are  now  too 
long  and  can  be  reduced  without  loss  of  output. 

2.  By  economizing  time,  apart  from  any  increased  rapidity 
of  working,  the  hourly  rate  of  output  can  be  considerably 
increased. 

3.  Though  hours  of  work  have  been  much  reduced  during 
the  past  two  years,  the  time  is  ripe  for  further  substantial 
reductions.  What  the  extent  of  the  reduction  should  be 
in  any  particular  case  can  only  be  determined  after 
considering  a  number  of  factors  such  as  the  physical  or 
mental  strain  of  the  work,  the  extent  to  which  the  pace  of 
the  work  is  governed  by  the  machine,  the  factory  environ- 
ment, the  physical  capacity,  the  age,  sex,  and  experience 
of  the  worker,  the  suitability  of  the  food  taken  by  the 
worker,  the  arrangement  of  hours  of  work  and  conditions 
outside  the  factory,  e.g.,  housing  and  transit. 

No  evidence  is  available  as  to  what  action  was  taken  in 
munition  factories  in  consequence  of  this  report. 

With  the  signing  of  the  armistice,  a  powerful  agitation 
commenced  for  shorter  hours.  This  movement  is  con- 
nected directly  with  the  long  hours  and  the  intense  strain 
of  the  war  period.  The  long  hours  of  the  munition  fac- 
tories brought  an  appreciation  of  leisure  as  an  element 
which  labor  was  demanding  to  secure  better  living  condi- 
tions. There  was  also  a  widespread  desire  to  find  in  the 
reduced  hours  a  temporary  remedy  for  unemployment. 
Indirectly  the  demand  for  shorter  hours  is  connected  with 
that  for  a  share  in  the  control  of  management.  The 
workers  held  that  the  immense  productive  capacity  of 
industry  manifested  during  the  war  left  a  margin  for 
reduced  hours,  and  that  a  voice  for  labor  on  questions  of 
control  would  assist  in  maintaining  that  margin. 

The  first  industry  from  which  the  demand  arose  was  the 
engineering  trades,  which  promptly  asked  for  a  44-hour 
week,  instead  of  the  54-hour  week  in  general  vogue.  The 
employers  rejected  the  demand,  but  the  two  chief  em- 
ployers' associations,  the  Engineering  and  National 
Employers'  Federation  and  the  Shipbuilding  Employers' 
Federation,  met  with  the  Amalgamated  Society  of  Engi- 

*  "Health  of  Munition  Workers'  Committee,  Final  Report,"  p.  122. 

154 


neers  and  the  unions  affiliated  to  the  Engineering  and 
Shipbuilding  Trades'  Federation,  and  agreed  upon  a 
47-hour  week  without  any  reduction  In  wages.  This  offer 
was  submitted  to  a  ballot  of  the  unionists  of  the  engineer- 
ing trades,  and  was  carried  by  286,545  votes  to  148,526. 
Today  these  employers  Intend  to  stand  firm  for  no 
reduction  below  48  hours  per  week.  The  executive  of  the 
railway  unions  agreed  to  accept  for  the  railway  workshops 
the  same  conditions  as  the  engineers  had  adopted.  This 
agreement  for  the  47-hour  week  provided  also  that  time 
rates  for  day  and  night  shifts  and  all  premium  bonus 
earnings  were  to  be  Increased  so  as  to  bring  the  earnings 
on  the  reduced  hours  up  to  the  level  of  previous  earnings. 
No  changes,  however,  were  to  be  made  in  piece-rates  or 
"lieu"  rates.  The  starting  hour  was  advanced  con- 
siderably In  most  establishments,  and  the  breakfast 
Interval  was  done  away  with.  The  questions  of  piece  and 
"lieu"  rates  and  the  starting  hour  proved  exceedingly 
troublesome.  Further,  although  the  total  vote  taken  by 
the  Associated  Society  of  Engineers  and  allied  unions  was 
affirmative,  the  boilermakers,  as  a  separate  union,  carried 
a  vote  against  the  agreement,  and  several  other  unions, 
such  as  pattern  makers  and  shipwrights,  had  substantial 
minorities  against  it.  Consequently,  when  the  altered 
domestic  arrangements,  arising  from  the  different  hour  of 
starting,  proved  Inconvenient,  and  a  widespread  reduction 
of  earnings  resulted  from  working  reduced  hours  at  un- 
altered piece-rates,  there  was  considerable  trouble  in  the 
engineering  and  shipbuilding  trades.  This  lasted  all 
through  the  month  of  January,  1919.  Practically  all  the 
strikes  that  resulted  were  unauthorized,  and  the  em- 
ployers In  the  Industry  lent  their  support  to  the  trade 
union  officials  who  were  endeavoring  to  hold  their  men  to 
the  ballot  and  the  agreement. 

The  position  was  complicated  by  a  demand  In  Scotland 
for  a  40-hour  week,  based  on  the  alleged  need  for  reduced 
hours  to  remedy  the  unemployment  of  demobilized 
soldiers  and  sailors.  This  demand  led  to  considerable 
trouble  In  Glasgow  and  along  the  Clyde.  These  strikes 
also  were,  In  general,  unauthorized  by  the  Engineering 
and  Shipbuilding  Trades  Federation,  though  backed 
by  the  Scottish  Trade  Union  Congress  and  by  several  of 
the  Scottish  trade  unions.  In  this  case,  again,  the  em- 
ployers and  even  the  Government  supported  the  trade 
union  executives  in  their  endeavor  to  secure  the  working 

155 


of  the  47-hour  scheme.  The  effect  of  this  turmoil  upon  the 
attitude  of  Scottish  employers  towards  trade  unions  was, 
however,  apparent  at  the  time  of  the  visit  of  the  Com- 
mission. It  should  also  be  added  that  the  Executive 
Committee  of  the  Amalgamated  Society  of  Engineers 
suspended  their  secretaries  and  committees  in  three 
districts  because  of  their  unconstitutional  and  un- 
authorized action. 

The  railwaymen  also  began  to  agitate  soon  after  the 
armistice  for  an  8-hour  day.  Early  in  January,  the 
President  of  the  Board  of  Trade,  who  is  responsible  for 
the  administration  of  the  railways,  announced  that  the 
principle  of  the  8-hour  day  was  conceded  and  would  be 
given  effect  from  February  1st.  The  several  systems  of 
hours  in  vogue  made  the  application  of  the  principle  one 
of  considerable  difficulty,  and  led  to  protracted  negotia- 
tions. The  question  of  whether  a  definite  meal  period  was 
to  be  allotted  and  was,  or  was  not,  to  be  included  in  the 
8-hour  day  was  one  of  the  most  vexing  problems.  The 
"advanced"  sections  of  the  men  sought  to  obtain  an 
8-hour  day  "over  all,"  that  is,  including  mealtimes,  the 
equivalent  of  only  about  42  hours  duty  per  week.  Event- 
ually, a  settlement  was  reached  that  the  standard  week 
was  to  consist  of  48  hours,  the  standard  week's  wages  were 
to  be  guaranteed,  overtime  paid  for  time  worked  each 
day  in  excess  of  the  standard,  meal  hours  and  similar 
arrangements  to  remain  unaltered. 

The  miners,  who  had  had  an  8-hour  day  for  several 
years,  preferred  at  the  same  time  a  demand  for  a  6-hour 
day.  The  results  of  their  demands  and  what  was  granted 
them  are  discussed  fully  in  a  later  chapter.^ 

From  the  Transport  Workers'  Federation  came  a  de- 
mand for  a  44-hour  week.  The  employers  offered  a  48- 
hour  standard  week,  and  the  Minister  of  Labour  suggested 
that  the  question  of  hours  be  submitted  to  arbitration. 
Employers  refused  the  latter  suggestion.  Eventually, 
after  protracted  negotiation,  the  44-hour  week  was 
secured  without  loss  of  earnings. 

In  the  textile  industries  a  similar  movement  took  place. 
The  woolen  and  worsted  section  of  this  industry  dealt 
with  the  matter  through  its  Joint  Standing  Industrial 
Council,  which  had  been  formed  before  the  plan  suggested 
by    the    Whitley    Commission.      Representatives    of    the 

*  See  Chapter  XXII.  page  343. 

156 


employees  on  this  council  asked  for  a  reduction  of  hours 
from  553^  to  44  per  week.  The  employers  were  ready  for 
a  reduction,  and  no  difficulty  was  experienced  in  arriving 
at  a  compromise  of  48  hours  per  week.  In  the  cotton 
industry  a  similar  demand  was  made,  that  is,  for  a  reduc- 
tion from  553/2  to  44  hours  per  week.  In  this  case,  the 
trade  was  in  a  bad  way,  because  of  restrictions  and  the 
submarine  blockade.  Its  future,  too,  was  a  matter  of 
deep  concern.  Such  a  serious  reduction  threatened  to 
increase  the  cost  of  production  greatly  and  to  make 
competition  difficult  in  the  world  market,  because  a 
shortening  of  hours  and  the  time  during  which  the 
machinery  was  running,  clearly  reduced  the  quantity  of 
the  product.  The  employers,  therefore,  offered  a  reduc- 
tion to  4:9}/2  hours  a  week.  The  matter  was  discussed  for 
months  in  the  joint  committees  characteristic  of  this 
industry.  Eventually,  a  strike  precipitated  the  acceptance 
of  the  employers'  later  offer  of  a  48-hour  week. 

In  other  industries  a  similar  movement  was  taking 
place.  The  hours  prevailing  in  each,  according  to  latest 
information  of  reduction,^  are  shown  in  the  following 
table: 

49  Hours:   Silk. 

48  Hours:  Iron  and  steel. 

Tramway  workers. 

Omnibus  drivers. 

Laundry  workers. 

Textile  bleaching  and  dyeing. 

Hosiery. 

Furniture  warehousing. 

Bobbin  and  shuttle  making. 

Saddlery  and  harness  making. 

Clay  industries. 

Carpet  making. 

Boot  and  shoe. 
47  Hours:  Gas  workers  (dayworkers). 

Furniture  makers. 

Rubber. 

Flour  milling  (dayworkers). 

Tinplate  (dayworkers). 

Spelter  (dayworkers). 

Farriers. 

Vehicle  builders. 

Jewelry  makers. 

Chemical  workers. 

Match  makers. 

^  See  Labour  Gazette,  January-June,  1919. 

157 


44  Hours:  Engineers  and  firemen  in  cold  storage  works. 
Plumbers. 
Dock  laborers. 

Flour  milling  (shift  workers). 
Pottery  makers. 

Building  trade  operatives  (Scotland). 
Confectionery  workers. 

This  list  by  no  means  represents  the  sum  total  of 
reduction  in  hours  achieved  in  Great  Britain.  Many 
trades  which  have  not  decided  upon  a  uniform  week  have 
submitted  to  considerable  reductions  in  hours,  perhaps 
temporarily,  to  absorb  unemployed  members  of  the  trade 
or  probably  as  an  experiment. 

Further,  the  general  preponderance  of  the  48  and  47 
hour  week  in  the  above  list  does  not  represent  a  position 
of  stable  equilibrium.  The  workers  are  not  satisfied  with 
these  hours.  There  is  a  general  demand  for  a  44-hour 
week.  The  various  unions  in  the  engineering  trade  have 
authorized  their  executives  by  an  overwhelming  vote  to 
approach  the  employers  with  a  request  for  the  44-hour 
week  without  reduction  of  earnings.  Negotiations  are  now 
proceeding,  but  the  employers  are  unwilling  to  go  below 
48  hours.  The  National  Federation  of  General  Workers, 
too,  which  Is  strong  in  numbers  though  not  in  cohesion. 
Is  also  putting  forward  a  demand  for  the  44-hour  week. 
As  this  federation  comprises  the  less  skilled  and  unskilled 
workers  in  the  smaller  and  more  scattered  industries,  com- 
pliance with  this  demand  would  bring  many  industries 
into  the  44-hour  group. 

The  question  of  hours  of  employment  has  been  a  matter 
for  consideration  by  the  provisional  joint  committee  of  the 
National  Industrial  Conference.  The  committee,  which 
consisted  of  30  employers,  representing  as  many  trades 
and  industries,  and  30  trade  unionists,  representing  an 
equal  number  of  trade  unions,  was 

unanimous  in  recommending  the  principle  of  a  legal  maximum 
of  normal  hours  per  week  for  all  employed  persons.  The  num- 
ber of  hours  they  recommend  is  48;  but  they  recognize  that 
this  number  may  be  reduced  by  agreement,  and  that  there 
are  also  exceptional  cases  in  which  it  may  be  necessary  that 
it    should  be  increased. 

Its  detailed  recommendations  include  suggestions  that  a 
maximum  week  of  48  hours  should  be  legally  established 

158 


by  act  of  Parliament,  and  should  apply  generally  to  all 
employed  persons.  Provision,  however,  should  be  made 
for  exemption  or  variation  where  an  agreement  had  been 
reached  between  representative  organizations  of  em- 
ployers and  employed  for  a  lower  or  higher  maximum,  and 
for  action  to  consider  a  variation  where  no  such  agreement 
had  been  reached. 

Since  this  committee  reported  on  April  4th,  it  has 
given  attention  to  the  terms  of  a  draft  bill  prepared  by 
the  Ministry  of  Labour  to  give  effect  to  their  recommenda- 
tions. The  announcement  has  been  made^  that  agreement 
had  been  reached  between  the  Minister  and  the  joint 
committee,  and  that  the  bill  would  soon  be  presented  to 
Parliament.  It  should  be  noted  that  this  measure,  which 
will  provide  for  a  basic  48-hour  week  rather  than  an 
8-hour  day,  represents  a  practical  proposal  commanding 
the  united  support  of  employers  and  employed.  There  is, 
however,  among  certain  groups  of  laborers,  a  demand  for 
a  44-hour  week,  or  one  even  shorter. 

§  2.     France 

The  prevailing  hours  in  French  industry  before  the 
war  were  from  10  to  103^  hours  per  day.  In  the  language 
of  the  labor  code,  in  which  the  hour  named  was  fixed 
as  and  from  March,  1913,  the  day's  work  of  an  adult  man 
in  factories  was  not  to  exceed  10  hours  of  eifective  labor. 
For  women  eighteen  years  of  age  and  over  the  same  reg- 
ulation was  in  force,  except  that  periods  of  rest  not  less 
than  an  hour  in  all  were  to  be  allowed  in  the  course  of 
the  day.  By  a  decree  of  June  30,  1913,  women  employed 
in  certain  seasonal  industries  could  be  employed  at  night 
for  a  maximum  of  10  hours.  This  night  work  must  not  be 
prolonged  beyond  12  hours  out  of  the  24,  nor  exceed  60 
days  in  the  course  of  the  year.  In  contrast,  miners  and 
underground  workers  had  the  8-hour  day  by  a  decree 
dated  December  31,  1913. 

With  the  opening  of  the  year  1919,  the  question  of  the 
8-hour  day  came  up,  chiefly  through  political  influences. 
Left  to  themselves  no  very  active  demand  would  have 
come  from  the  workers  themselves.  It  came  in  connec- 
tion with  the  resolutions  of  the  Commission  on  Inter- 
national Labor  Legislation  attached  to  the  Peace  Com- 

1  The  Times,  London,  June  17,  1919,  p.  10. 

159 


mission.  In  addition,  the  political  influence  of  the 
recommendations  made  by  the  National  Industrial  Con- 
ference in  Great  Britain  and  those  which  the  Government 
in  Italy  brought  to  bear  on  employers,  were  used  to  affect 
the  French  action.  Indeed,  as  regards  the  United  States, 
it  was  wrongly  stated  that  a  national  8-hour  day  was 
already  in  force.  On  this  basis,  they  argued  that  France 
could  not  remain  behind  these  other  countries.  Thus 
the  pressure  in  favor  of  the  law  was  largely  political. 

Your  Commission  was  informed  that  no  serious  demand 
for  the  8-hour  day  came  from  the  general  rank  and  file 
of  the  workers.  Nor  did  the  employers  willingly  accept 
the  principle.  Legislative  action  came  about  by  pressure 
from  governmental  sources.  A  proposed  8-Hour  Law  was 
drawn  up  by  M.  Colliard,  Minister  of  Labor,  and  sub- 
mitted to  the  Chamber  of  Deputies,  and  to  a  joint  com- 
mission of  employers  and  trade  unionists.  This  committee 
was  that  set  up  by  employers'  associations  and  trade 
unions  to  guide  the  French  section  of  the  Commission  on 
International  Labor  Legislation. 

The  employers  on  this  committee  protested  in  a  pub- 
lished statement,  April  2d,  against  the  proposed  law  and 
pointed  out  the  grave  economic  position  of  the  country, 
putting  forth  the  following  statements: 

1.  That  the  total  production  of  France  before  the  war  was 
about  eight  billion  dollars. 

2.  That  nearly  2,000,000  workers,  or  about  9  per  cent  of 
those  engaged  in  industry,  commerce,  and  agriculture, 
had  been  killed  or  maimed. 

3.  That  in  this  loss  of  workers,  France  had  been  struck  one 
and  a  half  times  more  than  Germany,  two  and  a  half  times 
more  than  Belgium,  five  times  more  than  England  and 
Italy,  fifty-six  times  more  than  the  United  States. 

4.  Together  with  the  frightful  reduction  in  births,  the  effects 
of  which  would  be  felt  even  until  1950,  the  diminution  of 
20  per  cent  in  the  hours  of  labor  from  10  to  8  would 
cause  a  reduction  in  the  total  production  of  France  of  about 
30  per  cent,  which,  on  the  figure  of  pre-war  production, 
would  mean  about  12,400,000,000,  only  a  small  part  of 
which  could  be  won  back  by  increased  production. 

Arguing  on  this  basis,  the  employers  declared  their 
certain  belief  that  a  uniform  and  rapid  reduction  in  the 
hours    of    labor    would    exert    a    disastrous    influence   on 

IGO 


national  production.  While  denying  that  France  was 
"notoriously  backward"  in  the  use  of  machinery,  they 
declared  that  machinery  and  mechanical  organization 
could  not  make  up  the  deficit,  for  they  would  be  inappli- 
cable in  the  many  small  industries  whose  works  repre- 
sented 90  per  cent  of  the  factories  of  France.^ 

Having  pointed  out  the  economic  error  which,  in  their 
opinion,  was  about  to  be  committed,  and  realizing  that 
the  political  circumstances  were  beyond  their  control, 
these  employers  admitted  that  it  would  be  neither  wise 
for  them  to  postpone  the  practical  examination  of  the 
proposal,  nor  practical  to  refuse  their  collaboration  in 
studying  the  manner  of  its  application  and  in  diminishing 
its  dangers.  It  was  in  this  spirit  of  grave  dismay  and  to 
this  extent  that  the  employers  of  France  endorsed  the 
legislative  8-hour  day. 

The  attitude  of  the  workers'  representatives  was  that 
production  could  be  maintained  and  to  that  effect  they 
have  given  their  promise.  They  seem  to  believe  that 
with  an  intelligent  use  of  the  principles  of  scientific 
management  and  an  increased  use  of  machinery,  much 
can  be  done  to  make  up  for  the  inevitable  loss  of  produc- 
tion. In  a  labor  program  drawn  up  by  Leon  Jouhaux 
{Les  Travailleurs  devant  la  Paix)  this  general  attitude  is 
expressed  as  follows: 

For  the  working  class  —  a  maximum  production  in  mini- 
mum working  time  for  maximum  wage. 

For  the  producer  —  maximum  development  of  shop 
equipment  to  produce  maximum  output  with  minimum 
expense  of  production. 

It  must  be  said  to  their  credit  that  French  workers  give 
not  even  the  shadow  of  endorsement  to  the  "ca'canny" 
methods  of  the  British  trade  unionist.  But  it  must  also 
be  said  that  there  is  much  "slack"  in  the  organization  of 
French  factories.  Employers  remarked  that  the  French 
workpeople  were  not  disposed  to  steady, continuous  effort. 
They  are  slow  in  getting  started,  and  like  to  walk  around 
considerably.  While  this  condition  admits  of  the  possi- 
bility of  increased  hourly  production,  it,  nevertheless, 
serves  to  show  the  extent  of  the  challenge  which  the 
8-hour  day  makes  upon  French  industry.    The  difficulties 

iCf.  Chapter  XVIII,  §5. 

161 


In  increasing  and  perfecting  machinery  and  in  finding  an 
increased  work  force  were  not  faced  in  any  discussion 
preliminary  to  tlie  passage  of  the  bill. 

The  legislative  proposal  was  introduced  April  8th, 
passed  April  17th  by  the  Chamber  of  Deputies,  and  by  the 
Senate  April  18,  1919.  The  law  was  immediately  pro- 
claimed. It  provided  that  in  all  industrial  and  com- 
mercial establishments  the  duration  of  effective  labor  was 
not  to  exceed  either  8  hours  per  day  or  48  hours  per  week, 
or  an  equivalent  limitation  established  over  a  period  of 
time  other  than  a  week.  The  law  applied  to  all  industrial 
and  commercial  establishments,  public  or  private,  lay  or 
clerical,  educational  or  charitable.  The  public  administra- 
tion was  to  lay  down  rules  as  to  the  operation  of  the  law  in 
each  occupation,  industry,  commerce,  or  class  of  business, 
either  in  the  whole  territory  or  for  any  one  region.  These 
regulations  are  to  take  effect  at  the  request  of  one  or  more 
organizations  of  employers  or  workers,  national  or  regional. 
In  all  cases  these  organizations  are  to  be  consulted,  and 
should  report  within  a  month.  These  rules,  moreover, 
should  accord  with  agreements  (wherever  they  exist) 
between  the  organizations  of  employers  and  workers. 
The  regulations  are  expected  to  deal  especially  with: 

1.  The  distribution  of  the  48  hours  per  week  so  as  to  allow  a 
rest  on  Saturday  afternoon,  or  any  equivalent  arrangement. 

2.  Arrangement  of  hours  in  any  other  period  than  a  week. 

3.  The  extension  of  the  actual  hours  of  labor  obtaining  in  any 
occupation  or  business  shall  be  spread  over  such  periods 
as  will  conform  to  the  general  provisions  of  the  law. 

4.  Allowances  for  apprentices  or  occasional  labor. 

5.  Allowances  for  temporary  emergencies  or  the  national  needs. 

6.  Fixing  the  hours  of  rest  and  of  effective  labor. 

7.  The  region  to  which  the  rules  apply. 

A  second  article  declares  that  no  reduction  of  wages  is  to 
follow  the  reduction  in  hours. 

The  law  made  no  provision  for  the  date  at  which  it  was 
to  come  into  operation.  It  established  the  principle, 
leaving  to  the  industries  concerned  to  make  those  adjust- 
ments called  for  by  the  endorsement  of  the  principle.  It 
was  expected  that  a  reasonable  time  would  be  allowed 
employers  to  arrange  for  the  altered  organization  of  their 
workshops.     Many  industries  were  able   to  fix  June  1st 

162 


for  the  application  of  the  8-hour  day.  But  the  readjust- 
ment of  wage  scales,  particularly  piece-rates  and  minimum 
rates,  gave  much  trouble.  In  consequence,  few  industries 
were  really  adjusted  to  the  new  conditions  by  June  1st, 
and  a  whole  crop  of  strikes  arose.  Before  the  8-hour  law 
had  been  passed  an  agreement  on  the  same  basis  had 
been  entered  into  between  the  employers  and  workers  in 
the  metal  trades.  In  the  discussion  they  were  concerned 
chiefly  with  the  methods  of  application  of  the  principle. 
The  difficulties  in  the  way  of  its  application  were  chiefly 
those  incidental  to  the  inauguration  of  three  shifts  instead 
of  two,  viz.,  the  modification  and  increase  of  machinery 
and  the  recruiting  of  an  enlarged  work  force.  The  agree- 
ment which  covered  the  metal  and  allied  trades  provided 
for  a  day  of  8  hours  effective  labor.  The  unions  asserted 
in  the  agreement  their  willingness  "to  adapt  themselves 
sympathetically  to  the  development  of  machinery  and  to 
rational  methods  of  work  so  that  production  should 
rapidly  find  that  equilbrium  indispensable  to  the  general 
well-being."  The  agreement  stipulated  that  the  8-hour 
day  should  not  come  into  force  until  June  1,  1919,  while 
in  foundries  where  processes  were  continuous,  employers 
would  have  until  six  months  after  the  signing  of  peace  to 
make  the  necessary  adjustments. 

The  strike  in  the  metal  trades,  which  broke  out  in  June, 
was  in  strange  contrast  to  the  agreement  arrived  at  in 
April,  1919.  The  difficulties  encountered  in  this  trade 
will  illustrate  the  whole  situation  throughout  France  in 
June,  1919.  The  agreement  signed  in  April  by  the  metal 
trades  had  provided  for  either  8  hours  worked  per  day  or  a 
weekly  maximum  of  48  hours  with  the  Saturday  half 
holiday.  Later  the  workers  claimed  a  minimum  wage, 
specifying  weekly  payments  for  various  grades  with  equal 
pay  for  women.  Further  trouble  arose  over  the  regula- 
tion of  piece-rates  and  the  question  of  maintaining  produc- 
tion. The  employers  held  that,  although  time  rates  were 
to  be  the  same  for  the  shorter  day,  there  was  no  provision 
made  for  revision  of  piece-rates  except  in  the  case  where, 
without  modification  of  machinery,  these  rates  would  not 
permit  the  workers  to  reach  their  usual  earnings.  The 
workers  replied  that  it  was  incumbent  on  the  employers 
to  transform  their  machinery  and  introduce  modern 
methods.  The  workers  said:  "With  that  [machinery] 
which  we  possess,  it  is  impossible  for  us  to  furnish  in 
eight  hours  what  we  furnish  now  in  ten."     Other  smaller 

1G3 


matters  of  safety  and  welfare  seemed  to  have  been 
brought  forward.  Agreement  was  not  reached;  the  metal 
workers  struck  and  had  not  resumed  work  at  the  end  of 
June. 

The  miners,  among  whom  the  8-hour  day  was  in 
operation,  also  struck  for  a  new  calculation  of  the  8-hour 
day.  According  to  the  law  of  December  31,  1913,  the 
day's  labor  in  mines  was  to  count  from  the  usual  hour  of 
entrance  into  the  pits  of  the  last  workers  going  down  to 
that  of  the  first  workers  coming  up.  The  miners  now 
asked  that  it  should  be  counted  from  the  first  man  down 
to  the  last  man  up.  It  was  estimated  that  this  would 
mean  only  6  hours  50  minutes  or  7  hours  effective  work. 
The  official  reporter  to  the  Senate,^  in  discussing  this 
situation,  pointed  out  that  a  great  diminution  of  produc- 
tion was  to  be  expected.  Already  France  was  in  need  of 
fifty  million  tons  of  coal  yearly,  to  be  obtained  from  other 
countries,  and  further  reduction  of  her  own  production 
would  be  disastrous.  Nor  were  the  French  miners  any 
more  successful  than  the  British  in  maintaining  produc- 
tion. The  following  figures  for  the  first  four  months  of 
1918  and  1919  were  supplied  to  the  Senate: 

MONTHLY    PRODUCTION    IN    TONS    OF    FRENCH    COAL    MINES 
FOR  JANUARY-MAY,   I918,  AND  JANUARY-MAY,   I9I9 

Month  1918  1919 

January 2,045,000  2,304,000 

February 2,455,000  2,034,000 

March 2,681,000  1,8x7,000 

April 2,243,000  1.635,000 

May 1,896,000  1,595,000 

Total 11,320,000  9,455,000 

The  Government  at  first  opposed  the  miners'  demand, 
but  suddenly  "changed  face"  and  adopted  a  projected 
law  which  granted  their  demands.  This  law  was  promul- 
gated on  June  24,  1919. 

In  some  other  industries  the  10-hour  law  is  still  in  eff'ect. 

After  some  experience  with  the  working  of  the  8-hour 
day,  certain  French  manufacturers  have  voiced  their 
complaint  against  the  operation  of  the  8-hour  law  in 
French  industry  during  this  critical  period.  Many  articles 
have  appeared  in  the  French  press  on  this  subject.    One  in 

'  See  verbatim  report,  L I njormalinn,  '"OuvricMc  cl  Socialc,"  June  22, 1919,  p.  3. 

104 


The  Figaro  suggests  that  It  may  be  necessary  to  permit 
some  flexibility  in  the  appHcatlon  of  the  8-hour  law, 
especially  at  this  time.  La  Chambre  syndicale  du  Cycle 
et  de  I'' Automobile,  on  July  16th,  addressed  to  the  Minister 
of  Labor  an  open  letter  which  appeared  in  many  French 
papers.  They  urged  In  this  letter  that  the  application  of 
the  8-hour  day  at  present  will  be  disastrous  to  this  type  of 
industry  and  that  for  some  time  to  come  the  old  workday 
should  be  restored.  In  reply  to  this  letter,  the  Secretary 
of  the  C.  G.  T.,  M.  Leon  Jouhaux,  In  an  article  In  La 
Bataille  of  August  26th,  declared  that  organized  labor  shall 
stand  fast  for  the  application  of  the  8-hour  day  in  all 
industries.^ 

§  3.     Italy 

Up  to  the  month  of  February,  1919,  the  day's  work  in 
most  Italian  Industries  ranged  from  10  to  10^  hours,  or 
from  60  to  66  per  week.  After  the  close  of  the  war,  the 
demand  for  an  8-hour  day  arose.  This  demand  may  have 
been  due  to  the  reaction  from  the  long  hours  previously 
worked,  but  Its  two  chief  grounds  lay  in  the  fear  of  unem- 
ployment due  to  the  demobilization  of  the  troops  and  In 
the  general  movement  In  labor  circles  In  Great  Britain  and 
France  in  favor  of  an  8-hour  day.  The  strength  of  the 
fear  of  unemployment  Is  shown  by  the  unreadiness  of  the 
Italian  Government  to  demobilize  its  troops.  By  June, 
1919,  In  which  month  a  majority  of  American  and  British 
soldiers  had  been  demobilized,  Italy  had  demobilized  only 
2,200,000  of  her  troops,  and  still  had  nearly  2,000,000  In 
service.  Her  Industries  were  not  ready  to  absorb  these 
troops;  hence  the  demand  on  the  part  of  the  workers  for 
reduced  hours. 

The  earliest  of  the  recent  efforts  to  obtain  an  8-hour 
day  was  initiated  at  a  congress  of  the  Confederazione 
del  Lavoro  (Confederation  of  Labor)  held  at  Milan  in 
September,  1918.  This  gathering  adopted  the  8-hour 
day  as  one  of  the  post-war  demands.  From  the  sign- 
ing of  the  armistice,  the  various  trade  unions  afhllated 
began  to  take  steps  to  approach  employers.  In  February, 
1919,  a  meeting  was  held  with  employers  In  the  metal 
trades,  and  an  agreement  arrived  at.  A  working  week  of 
48  hours  was  to  be  Introduced  in  the  engineering  section 
from  May  1st,  and  In  continuous  processes  from  July  1st. 

^  L' Information,  "Ouvriere  et  Sociale,"  August  28,  1919. 

165 


The  agreement  specifies^  that  In  engineering  establish- 
ments, shipbuilding  yards,  and  allied  trades,  hours  were  to 
be  reduced  from  60  or  55  to  48  per  week.  In  foundries, 
where  continuous  processes  were  worked,  a  two-shift 
system  of  12  hours  each  was  to  give  way  to  a  three-shift 
system  of  8  hours.  It  was  agreed  that  the  shifts  were  to  be 
worked,  where  possible,  without  an  increase  in  the  work 
force.  The  weekly  schedule  in  the  case  of  such  shift  of 
workers  could  be  varied  from  the  48-hour  week,  but  was 
not  to  total  more  than  144  hours  in  three  weeks. 

The  next  industry  in  which  the  8-hour  day  was  asked 
was  the  textile  industry.  In  this  industry  the  position  of 
the  manufacturers  was  exceedingly  difficult.  It  was 
generally  understood  that  the  unions  were  taking  advan- 
tage of  the  critical  situation  produced  by  the  difficulties  in 
securing  the  peace  terms  demanded  by  Italy,  and  were 
threatening  strikes  and  disorder.  Under  the  pressure  of 
the  Government,  who  seemed  anxious  to  prevent  an 
upheaval  at  this  time,  the  employers  reluctantly 
acquiesced.  Already  the  costs  in  the  cotton  mills,  as 
compared  with  pre-war  times,  had  been  trebled.  The 
shorter  hours  would  add  to  this  disability.  Their  views 
are  presented  in  a  resolution  carried  at  a  meeting  of  cotton 
manufacturers  held  in  Milan  on  March  14th. '^  The 
resolution  follows  in  full: 

At  a  special  meeting  of  cotton  manufacturers  the  report 
of  their  delegates  who  were  present  at  the  conference  with 
the  representatives  of  the  workers'  organizations  was  read. 
It  confirmed  all  the  reasons  of  a  technical  and  economic 
character  which  have  convinced  the  cotton  manufacturers 
that  the  reduction,  at  a  single  stroke,  of  the  working  week  to 
48  hours  would  (1)  increase  the  cost  of  production  in  Italy  in 
comparison  with  that  of  countries  more  advanced  industrially, 
especially  Great  Britain  (even  if  there,  too,  the  hours  be  re- 
duced to  48),  so  that  it  would  become  impossible  for  Italian 
goods  to  compete  in  foreign  markets  with  British  products; 
and  (2)  threaten  seriously  the  Italian  cotton  export  trade 
(which  comprises  40  per  cent  of  the  total  output).  An 
immediate  contraction  of  manufacturing  activity  must 
therefore  be  regarded  as  probable. 

Consequently,  the  manufacturers,  while  declaring  them- 
selves ready  to  grant  an  immediate  reduction  of  working  time 
to  54  hours  a  week,  mainlain   that  further  reductions  could 

'  Lahotir  Gazette,  London,  March,  1919,  p.  SO. 

^  See  Labour  Gazette,  April,  1919,  p.  128,  quoting  La  Tribuna,  March  lolh. 

166 


and  should  be  made  in  Italy  at  a  date  subsequent  to  reductions 
in  countries  more  advanced  industrially,  and  only  after  a  suffi- 
cient interval  for  experiment  and  preparation.  In  any  case 
it  would  be  absolutely  unjustifiable,  from  the  logical  point 
of  view,  to  adopt  the  48-hour  week  before  its  adoption  in 
Great  Britain. 

On  the  other  hand,  in  view  of  the  declaration  of  the  repre- 
sentatives of  the  textile  trade  unions  that  (while  acknowledg- 
ing the  basis  of  the  arguments  advanced  by  the  employers) 
it  is  their  intention  to  obtain  by  any  and  every  method  (not 
excluding  a  strike)  and  not  later  than  May  1st,  the  reduction 
of  a  working  week  to  48  hours  for  the  textile  trade  throughout 
Italy:  furthermore.  In  view  of  the  declarations  by  the 
representatives  of  the  General  Federation  of  Italian  Trade 
Unions,  of  its  complete  accord  with  the  textile  organizations, 
and  of  its  intention  to  support  the  demand  for  reduced  hours 
by  all  means  in  its  power  (including  even  a  general  strike  of 
all  workpeople),  the  manufacturers  consider  it  their  duty,  in 
the  difficult  and  hazardous  period  through  which  the  country 
is  passing,  not  merely  to  avoid  taking  the  lesponsibility  of 
refusing  (which,  in  any  case,  would  fall  on  the  other  side),  but 
even  to  avoid  the  giving  of  a  pretext  for  disorders  of  in- 
calculable extent  and  seriousness.  Consequently,  the  manu- 
facturers intend  to  reduce  the  working  week,  as  from  May  1st, 
to  48  hours;  but  they  disclaim  responsibility  for  the  results 
of  the  decreased  economic  activity  which,  in  their  opinion, 
will  follow  this  reduction  in  working  hours,  to  the  detriment 
of  both  parties  and  of  the  country. 

The  manufacturers  proceed  to  nominate  the  four  delegates 
and  three  substitute  delegates,  who,  acting  in  concert  with 
delegates  of  other  textile  trades  and  representatives  of  the 
trade  unions,  are  to  construct  a  working  timetable,  the  dele- 
gates being  commissioned  to  make  arrangements  to  insure: 
(1)  that  the  new  48-hour  week  shall  be  enforced  throughout 
Italy  on  May  1st;    (2)  that  the  same  reform  shall  become 
international  as  soon  as  possible;    (3)   that  the  new  working 
hours  shall  be  strictly  enforced  in  practice  so  as  to  guarantee 
a  yearly  total  of  hours  on  which  manufacturers  may  rely 
and    to    make   these    hours    real    working    hours,    without 
exceptions  of  any  kind;   and  (4)   that  the  other  demands  of 
the  workmen  shall  be  duly  moderated  because  of  the  full 
concession  made  by  the  employers  in  the  matter  of  hours 
of  work. 

In   the   shipbuilding   industry,   your   Commission   was 
informed: 

that  already  the  principle  of  the  8-hour  day  had  been  accepted 
but  that  the  details  of  its  operation  were  to  be  determined 
upon  later.    Under  the  8-hour  day  the  laborers  had  not  pro- 

167 


duced  as  much  as  in  the  10  hours.  Inasmuch  as  under  the 
10-hour  day  there  has  been  slowness  in  arriving  and  departing 
and  no  strenuous  working  during  the  day,  they  thought 
that  they  were  obtaining  nearly  as  much  in  product  under 
the  8-hour  day  as  under  the  10,  and  that  the  compensa- 
tion for  the  difiference  was  in  the  great  tranquillity  obtained 
by  granting  the  request  of  the  unions. 

Another  employer  in  this  field  said: 

In  regard  to  the  problem  of  the  8-hour  day,  when  they  had 
the  10-hour  day  they  practically  got  the  equivalent  of  9  hours 
of  work,  since  men  were  slow  in  coming  and  early  in  getting 
away.  Under  the  present  arrangement  of  8  hours,  they  were 
promised  a  better  spirit  of  work.  At  the  present  moment  the 
men  were  prompt  in  their  attendance  and  the  hours  ran  from 
7.30  to  11.30  and  1.30  to  5.30.  Nevertheless,  he  said,  they 
did  not  get  as  much  product  as  before  under  the  10  hours. 
When  asked  why  they  were  willing  to  accept  the  8-hour  day, 
he  reasoned  that  it  was  necessary  for  the  employers  to  stand 
together. 

In  the  silk  industry  where  wages  had  been  recently 
Increased  by  20  per  cent,  the  proposal  for  an  8-hour  day 
was  regarded  with  dismay.     One  employer  said: 

Now  there  is  a  demand  from  the  laborers  for  the  8-hour  day 
with  the  same  late  as  formerly  paid  for  10  hours.  To  this  we 
shall  present  strenuous  opposition.  This  additional  rise  in 
wages  means  still  greater  cost  of  production  and  if  carried 
through  would  mean  ruin  to  the  silk  mills.  In  reeling  and 
throwing  silk,  costs  are  now  40  per  cent  above  those  of  Japan, 
who  has  already  driven  Italy  out  of  the  American  market. 
Indeed,  they  had  been  presenting  their  case  before  the 
Government  at  Rome  at  the  present  moment.  Although  the 
Government  had  bought  up  the  silk  crop  under  a  valorization 
scheme,  it  favored  the  8-hour  law.  It  would  be  absolutely  im- 
possible for  them  to  accept  the  8-hour  law,  and  they  objected 
to  the  passage  of  the  law  by  Parliament  and  its  enforcement 
in  the  industry;  rather  than  accept  the  8-hour  day,  they  would 
be  obliged  to  resort  to  lockouts.  It  was  explained  that  the 
work  on  the  silk  required  a  very  delicate  touch  and  the  hands 
of  operatives  must  be  in  proper  condition.  If  the  8-hour  law 
were  introduced,  it  would  not  mean  that  the  workers  (who 
were  closely  connected  with  the  land)  would  cease  from  work 
those  extra  two  hours.  In  actual  fact,  they  would  resort 
to  rough  work  on  the  farms  for  two  hours  and  their  hands 
would  be  spoiled  for  the  delicate  silk  work.  From  every  point 
of  view,  they  found  the  operation  of  that  law  in  their  industry 
was  likely  to  be  disastrous.  In  the  silk  industry  it  is  not 
possible   to  use  extra   shifts  of  a   shorter  number  of  hours, 

168 


because  they  can  work  only  in  full  daylight.  In  connection 
with  the  competition  of  Japan,  the  Swiss  establishments  had 
made  a  suggestion  that  Switzerland  and  Italy  would  accept 
the  8-hour  law  if  Japan  would,  but  Japan  had  refused. 

On  the  general  question,  a  high  authority  gave  his 
opinion  against  the  wisdom  of  the  law: 

As  to  the  8-hour  law,  it  was  not  a  good  thing  for  the  men, 
since  a  shortening  of  the  hours  only  resulted  in  more  drunken- 
ness. The  reduction  of  the  hours  under  conditions  where 
there  are  no  pleasant  gardens  and  homes  for  the  men  works 
badly.  The  resort  to  drinking  places  is  an  inevitable  con- 
sequence of  no  desirable  places  for  recreation. 

An  important  financier  confirmed  this  view: 

In  regard  to  the  8-hour  law,  he  emphasized  the  fact  that 
there  were  no  clubs  or  suitable  places  for  recreation  for 
laborers;  therefore,  the  reduction  in  hours  to  8  would  not  only 
be  no  gain,  but  a  positive  loss  to  the  men. 

In  Italy  politics  had  already  been  Interwoven  with 
Industrial  questions.  As  has  been  said,  only  a  small 
percentage  of  laborers  is  organized  Into  unions;  but  the 
extreme  radicals  control  them.  They  are  the  ones  who 
make  speeches,  threaten,  and,  when  striking,  resort  to 
violence.  Thus  they  frighten  the  general  body  of  peaceful 
workers  into  joining  them  in  any  crisis;  and  they  succeed  in 
Intimidating  the  employers.  In  recent  months,  of  course, 
the  absorbing  question  In  Italy  has  been  her  attitude  to 
the  proposed  terms  of  peace.  Taking  advantage  of  this 
situation  the  extremists  have  increased  their  demands, 
and  to  avoid  a  general  strike  while  the  Peace  Congress 
was  in  session  at  Paris,  the  Government  brought  great 
pressure  to  bear  on  employers  to  meet  the  demands  of 
labor.  As  a  consequence,  not  so  much  because  of  the 
demands  of  organized  labor  as  to  meet  the  exigencies  of 
politics,  the  employers  have  generally  accepted  the 
principle  of  the  8-hour  day. 


169 


CHAPTER  X 

MINIMUM   WAGE 

§  1.     In  Great  Britain 

The  movement  towards  the  establishment  of  a  minimum 
wage  in  the  United  Kingdom  arose  from  an  outcry 
against  "sweating"  and  underpayment  in  a  number  of 
trades  in  which  women  chiefly  were  employed.  Much 
public  agitation  and  discussion  followed.  A  Sweated 
Industries  Exhibition  was  held  in  London.  An  inquiry 
was  made  by  the  Board  of  Trade  into  earnings  and 
hours,  and  revealed  the  wages  of  women  in  nearly  every  in- 
dustry, except  the  cotton  textiles,  to  be  "below  a  decent 
subsistence  level."  A  Select  Com^mittee  of  the  House 
of  Commons  investigated  the  matter  and  proposed  the 
establishment  of  Wages  Boards  for  certain  selected 
industries. 

Out  of  the  report  of  this  committee  sprang  the  Trade 
Boards  Act  of  1909,  which  specified  four  industries 
selected  as  not  only  the  most  sweated,  but  also  those 
which,  because  of  the  varying  economic  factors  affecting 
prices  therein,  were  likely  to  afford  the  best  field  for 
experiment.  In  1913  four  additional  trades  were  added. 
The  war  produced  no  change  in  the  number  or  scope  of 
the  trade  boards.  The  approach  of  peace,  however,  led 
to  a  new  act.  The  Trade  Boards  Act  of  1918,  which 
aimed  to  simplify,  expedite,  and  extend  the  procedure  of 
the  earlier  act.  In  the  dislocation  of  industry  which 
could  be  expected  after  the  war  the  problem  of  wages 
for  unskilled  and  unorganized  workers  might  come  up. 
Women  returning  to  their  old  trades  from  munition 
making,  it  was  felt,  might  need  to  be  protected  against 
their  own  competition,  while  women  remaining  in  occupa- 
tions formerly  confined  to  men  might  need  the  same  type 
of  protection  against  the  returning  soldiers.  The  new 
act  simplified  the  procedure  of  administration  so  that 
any  apparent  need  for  action  in  an  industry  could  be 
speedily  met,  widened  the  power  of  the  Minister  of 
J^abour  in  applying  the  act  to  new  trades,  and  accelerated 
the  machinery. 

170 


The  first  four  trades  brought  under  Trade  Boards  In 
1909,  because  the  prevailing  rate  of  wages  therein  was 
"exceptionally  low  as  compared  with  that  in  other 
employments,"  were  tailoring,  paper-box  making,  lace 
finishing,  and  certain  kinds  of  chain  making.  In  1913 
the  formation  of  boards  was  carried  out  in  four  other 
trades:  Sugar  confectionery  and  food-preserving,  shirt- 
making,  hollow-ware  making,  cotton  and  linen  embroid- 
ery. Later  the  hollow-ware  trade  was  divided  in  two, 
boards  being  established  for  metal  hollow-ware  and  for 
tin  boxes,  respectively.  The  Act  of  1909  provided  that 
a  separate  Trade  Board  must  be  established  in  Ireland 
to  deal  with  any  one  of  the  selected  industries  represented 
in  that  country.  There  were  five  of  these.  Hence, 
from  1913  to  1918,  there  were  in  existence  nine  Trade 
Boards  in  Great  Britain  and  five  in  Ireland. 

Since  the  passing  of  the  act  of  1918,  the  act  has  been 
extended,  not  to  trades  whose  wages  were  "exceptionally 
low,"  but  to  those  where,  on  account  of  defective  organi- 
zation, wages  were  unduly  low  or  where  there  was  reason 
to  apprehend  an  undue  fall  in  wages  when  the  special 
war  conditions  had  passed.  Under  the  terms  of  this 
extended  jurisdiction,  the  Minister  of  Labour  has  extended 
the  application  of  the  act  to  the  following  trades:  aerated 
waters;  tobacco;  rope,  twine,  and  net;  boot  and  shoe 
repairing;  laundry;  paper  bag;  brush  and  broom;  hair, 
brass,  and  fiber;  corset;  flax  and  hemp  spinning;  jute 
weaving;  jute,  flax,  and  hemp  finishing;  the  fur  trade; 
women's  clothing,  and  the  hat,  cap,  and  millinery  trades. 
This  makes  a  total  of  fifteen  new  Trade  Boards  up  to 
July  1,  1919. 

Each  Trade  Board  consists  of  two  classes  of  members. 
First,  it  contains  equal  numbers  of  representatives  of 
employers  and  of  workers.  As  the  latter  have  in  many 
cases  no  organization  through  which  they  can  elect 
representatives,  the  Board  of  Trade  has  the  right  alter- 
natively to  nominate  on  their  behalf.  It  should  be  noted 
that  these  representatives  need  not  themselves  be  either 
employers  or  workers.  As  a  consequence,  the  employers 
included  among  their  representatives  on  two  boards  their 
legal  adviser,  while  the  employees  have  had  the  help 
not  only  of  trade  union  secretaries,  but  of  men  and  women 
who  took  a  leading  part  in  the  anti-sweating  agitation. 

Secondly,  what  are  defined  as  neutral  persons,  are 
appointed  to  the  Board  by  the  Government  department: 

171 


They  are  not  officials  of  the  department,  but  persons  chosen 
from  outside,  selected  in  some  cases  for  their  special  knowledge 
of  industrial  conditions,  and  in  all  on  grounds  which  appear 
to  insure  that  they  will  bring  impartiality  and  intelligence  to 
the  consideration  of  the  problems  laid  before  them.^ 

This  appointed  element  is  restricted  both  in  numbers 
and  in  power.  It  must  always  be  less  than  half  the 
total  number  of  representatives  of  both  parties  on  the 
Board.  Thus  the  appointed  members  of  the  Chain 
Trade  Board,  the  first  one  set  up,  number  only  three 
out  of  a  total  of  fifteen.  On  the  Tailoring  Trade  Board 
they  number  only  five  out  of  a  total  of  forty-nine,  and 
on  the  Box  Trade  Board,  three  out  of  thirty-iive.  In  the 
deliberations  of  the  Board,  these  members  rarely  initiate 
proposals  or  discussions.  But  their  power  is  very  con- 
siderable, since  they  have  the  determining  voice  in  all 
matters  on  which  agreement  is  not  reached  between  the 
employers  and  the  workers. 

The  chief  function  of  a  Trade  Board  is  to  fix  minimum 
rates  of  wages,  that  is,  the  limit  below  which  wages  may 
not  legally  fall.  Scales  of  wages  are  not  set  up,  nor  is 
there  any  implication  that  the  minimum  named  is  to  be 
the  maximum  paid.  Employers  may  offer,  and  workers 
may  seek  to  secure,  higher  wages.  A  minimum  time-rate 
must  be  fixed  by  each  Trade  Board,  but  piece-rates  are 
optional.  That  is,  in  an  industry  where  piece-rates 
prevail,  the  Board  may  fix  the  piece-rates  or  may  leave 
them  to  the  employers.  In  the  latter  case,  however, 
it  is  obligatory  upon  him  to  calculate  the  rates  so  that 
earnings  for  an  ordinary  worker  shall  not  fall  below  what 
would  have  been  received  on  the  minimum  time-rate 
basis.  The  penalty  for  failure  to  pay  the  proper  rates 
is  to  be  not  more  than  £20. 

The  work  of  the  Boards  has  been  to  set  out  minimum 
rates  in  the  various  industries.  As  required  by  law, 
there  had  always  to  be  a  minimum  time-rate  fixed,  but 
chain  making  and  lace  finishing  are  the  only  trades 
known  to  have  minimum  piece-rates  as  well.  In  certain 
sections  of  the  box-making  trade  minimum  piece-rates 
were  fixed,  but  not  for  the  whole  trade.  The  provision 
that  the  employers'  piece-rates  should  be  so  fixed  as  to 
allow  the  ordinary  worker  to  earn  an  amount  equivalent 
to  what  could  be  earned  on  the  minimum  time-rate,  gave 

'  Constance  Smith,  "The  Working  of  the  Trade  Boards  Act  in  Great  Britain 
and  Ireland,"  Journal  oj  Polilical  Economy,  Ju'y,  1914,  p.  611. 

172 


some  difficulty  in  certain  trades.  The  trouble  arose 
over  the  definition  of  "ordinary  worker."  No  definition 
was  adopted,  but  instead  it  was  decreed  that  a  certain 
proportion  of  workers  must  be  earning  at  least  the  mini- 
mum as  above  defined.  In  the  tailoring  trade,  this  per- 
centage was  fixed  at  80  and  in  the  box  making  at  85 
per  cent.     This  allowed  a  fair  margin  for  slow  workers. 

It  should  be  noted  that  the  wage  rates  fixed  covered  the 
lowest  paid  workers  in  the  United  Kingdom.  In  the 
following  table  will  be  found  the  time-rates  and  expected 
earnings  for  adult  persons  for  the  various  boards  in 
existence  in  1916:^ 


MINIMUM  TIME  RATES  AND  EXPECTED  EARNINGS  FOR 
ADULTS  IN  VARIOUS  INDUSTRIES  UNDER  TRADE  BOARD 
ACT,    I916 


Trade 

Adult  Males 

Adult  Females 

Per 

Per 

U.S. 

Per 

Per 

U.S. 

Hour 

Week 

Curr. 

Hour 

Week 

Curr. 

Chain-making  .    . 

5d.  to  7d. 

22...* 

$5.36 

23Xd. 

14^.* 

$3.41 

Tailoring    .    .    .    . 

6d. 

25s.  6d. 

6.21 

zy2d. 

i4j.  H)y2d. 

3.62 

Paper-box  making 

Qd. 

2Qs. 

6.33 

3d. 

\3s. 

3.16 

Lace  finishing    .    . 

No  males  employed 

2Hd. 

\ls.  \\d. 

2.90 

Sugar,   confection- 

ery, and  food  pre- 

servmg   .    .    .    . 

6^. 

26s. 

6.33 

3d. 

13j. 

3.16 

Tin-box  making    . 

6^. 

26j. 

6.33 

3yid. 

14j.  U. 

3.43 

Hollow  ware  .    .    . 

5)4d. 

23s.  lOd. 

5.80 

3d. 

13/. 

3.16 

*Average  ple^-e-rate  earnings. 

These  wage  rates,  low  as  they  are,  represent  a  significant 
increase.  In  the  case  of  the  chain-making  industry  the 
piece-rates  set  represented  an  increase  of  from  19  to  67 
per  cent,  according  to  the  class  of  work  done.-  In  the 
tailoring  trades  the  increase  is  reported  to  have  extended 
to  at  least  38  per  cent  of  the  women  pieceworkers  and 
about  25  per  cent  of  the  men.^  In  the  box  trade  some 
52  per  cent  of  the  workers  would  have  received  an  increase 
of  wages. ^ 

^  Labour  Yearbook,  London,  1916,  p.  218;   1919,  pp.  324-27. 

^  R.  H.  Tawney:  "Studies  in  the  Minimum  Wage,"  1914,  p.  131. 

^  R.  H.  Tawney:  "Minimum  Rates  in  the  Tailoring  Industry,"  London,  1915, 
p.  253. 

■'M.  E.  Bulkley:  "Minimum  Rates  in  the  Box-Making  Industry,"  London, 
1915,  p.  89. 

173 


In  general  it  may  be  concluded  that  the  Trade  Boards 
have  raised  wages  considerably,  especially  among  the 
less  skillful  workers. 

There  is  no  general  tendency  for  the  minimum  wage 
to  become  the  maximum;  on  the  contrary,  it  is  the  wage 
of  the  poorest  paid  that  seems  to  have  been  raised,  while 
that  of  the  more  efficient  workers  was  less  affected.  The 
fixing  of  minimum  rates  in  these  unrepresentative  trades 
is  held  to  have  resulted  also  in  "better  organization 
among  the  employers  and  in  improvements  in  the  equip- 
ment and  organization  of  their  factories."^  Though 
prior  to  their  extension,  in  1918,  they  covered  375,000 
workers,  they  cannot,  because  of  the  circumstances 
characterizing  the  industries  included,  be  considerable 
factors  in  the  industrial  situation.  Their  chief  value 
must  always  lie  in  the  protection  they  afford  to  women 
and  young  persons  in  the  less  organized  trades. 

The  first  extension  of  the  wage  board  outside  the 
sweated  trades  occurred  in  1912.  In  that  year,  the 
miners  demanded  a  guaranteed  general  minimum  wage, 
covering  all  grades  of  workers,  though  varying  from 
district  to  district.  The  demand  was  enforced  by  a  strike. 
After  three  weeks,  the  Asquith  government  brought 
in  and  passed  the  Coal  Mines  (Minimum  Wage)  Act, 
1912.  This  act  did  not  name  any  specific  minimum  daily 
wage,  but  adopted  the  principle  that  miners  were  entitled 
to  a  minimum  wage  if  they  complied  with  certain  con- 
ditions as  to  regularity  or  efficiency  of  work.  For  the 
fixing  of  the  minimum  rates  and  the  determination  of 
the  conditions  as  to  regularity  and  efficiency  of  work, 
Joint  District  Boards  were  to  be  set  up.  These  were  to 
consist  of  equal  numbers  of  representatives  for  employers 
and  workmen,  respectively,  with  an  independent  chairman 
appointed  by  agreement  between  the  two  sides,  or, 
in  default,  by  the  Board  of  Trade.  It  is  important  to 
note  that  there  had  existed  in  each  mining  district  a 
Conciliation  Board  or  Joint  Committee  for  the  regula- 
tion of  wages,  and  that,  in  almost  every  case,  by  slight 
modifications,  this  became  the  District  Board. 

The  chief  effect  of  this  act  seems  to  have  been  exerted 
upon  the  wages  of  the  unskilled  underground  workers, 
who  were  upon  a  day-wage  basis.  These  men  form,  next 
to   the   coal   hewers,    llie   most   numerous   group   of  em- 

'  See  the  official  view  of  the  Board  of  Trade,  London,  in  Third  Report,  New 
York  State  P'actory  Investigating  Commission.    Appendix  III,  pp.  243-44. 

174 


ployees  in  the  mine.  Their  average  wage  after  the  passing 
of  the  act  was  somewhere  around  five  shilHngs  a  day  or 
thirty  shillings  per  week  of  six  days. 

The  next  extension  of  the  principle  was  to  agricultural 
laborers  in  terms  of  the  Corn  Production  Act,  1917. 
This  act  provided  for  Wages  Boards,  constituted  in  the 
same  form  and  for  the  same  end  as  the  Trade  Boards. 
They  are  to  consist  of  representatives  of  employers  and 
workmen,  in  equal  proportions,  and  of  members  appointed 
by  the  Board  of  Agriculture.  They  are  to  recommend 
minimum  rates  of  wages,  and  differential  rates  for  overtime 
employment.  The  principle  governing  the  determination 
was  that  contained  in  the  definition  of  minimum  wages  as 

wages  which  in  the  opinion  of  the  committee  are  adequate 
to  promote  efficiency,  and  to  enable  a  man  in  ordinary  case 
to  maintain  himself  and  his  family  in  accordance  with  such 
standard  of  comfort  as  may  be  reasonable  in  relation  to  the 
nature  of  his  occupation. 

The  act  went  a  step  farther  than  the  Coal  Mines 
(Minimum  Wage)  Act,  1912,  in  that  it  specified  that  the 
minimum  time-rates  fixed  for  able-bodied  men  must  be 
such  as  would  secure  a  weekly  wage  of  at  least  25  shillings 
a  week.  The  first  award  of  the  Board  specified  a  minimum 
of  30  shillings,  and  fixed  the  hours  of  work  at  54  per 
week  in  summer  and  48  in  winter.  Later  awards  ex- 
tended this  rate  fairly  widely  over  the  country,  but  in 
certain  parts  the  rate  was  made  35  shillings,  36  shillings, 
and  even  36  shillings  6  pence  per  week.  In  March,  1919, 
all  rates  were  revised,  and  approximately  6  shillings  and 
6  pence  per  week  added,  so  that  the  range  of  wages  is 
now  from  36  shillings  6  pence  to  42  shillings  6  pence. 

During  the  war  a  minimum  rate  was  fixed  for  women 
doing  men's  work  in  munitions.  This  was  fixed  at  £1 
and  afterwards  raised  to  24  shillings. 

The  question  of  minimum  wage  In  Great  Britain  was 
touched  by  the  report  of  the  Provisional  Joint  Committee 
of  the  National  Industrial  Conference,  April  4,  1919. 
This  committee,  consisting  of  30  employers  and  30 
representatives  of  the  trade  unions  recommended  that 
minimum  time-rates  of  wages  should  be  established 
by  legal  enactment,  and  ought  to  be  of  "universal  appli- 
cability." It  recommended,  further,  that  a  Commission 
should  be  appointed  to  report 

as  to  what  these  rates  should  be,  and  by  what  methods  and 
what  successive  steps  they  should  be  brought  into  operation. 

175 


§  2.     In  France 

The  minimum  wage  in  France  as  in  England  arose 
out  of  an  outcry  against  sweated  labor  in  home  work. 
Since  the  beginning  of  the  present  century  many  propo- 
sals of  a  law  to  deal  with  the  matter  had  been  made  in  the 
Chamber  of  Deputies.  From  1910  the  question  became  a 
practical  one,  though  its  progress  through  the  Chambers 
was  very  slow.  The  law  which  is  in  force  today  was 
introduced  in  1911,  was  carried  unanimously  by  the 
Chamber  of  Deputies  in  October,  1913,  and  after  a  unani- 
mous vote  in  the  Senate  and  slight  alterations  became 
law  on  July  10,  1915.  Its  date  makes  it  appear  a  war 
measure,  but  its  history  shows  it  to  have  arisen  from  the 
same  social  conditions  and  the  same  motives  as  prompted 
the  English  act. 

The  provisions  of  the  law  apply  to  all  female  workers 
executing  work  at  home  on  clothing,  hats,  shoes,  lingerie 
of  all  kinds,  embroidery,  lace,  feathers,  artificial  flowers, 
and  any  other  work  entering  into  the  clothing  industry. 
The  provisions  of  the  law  can  be  extended,  however,  on 
the  advice  of  the  Conseil  Superieur  de  Travail  (Superior 
Labor  Council),  to  homeworkers  other  than  those  named 
in  the  act. 

The  law  provided  that  minimum  rates  of  wages  were 
to  be  fixed  by  the  labor  councils  created  by  the  Act  of 
July  17,  1908.  These  councils  consisted  of  equal  numbers 
of  employers  and  employees.  But  as  few  of  these  were 
actually  in  existence,  the  act  provided  that,  in  their 
absence,  there  should  be  two  types  of  boards;  one,  comites 
de  salaries  (wages  boards)  and  the  other,  comites  profes- 
sionnels  d^ expertise  (board  of  trade  experts).  The  wages 
boards  were  to  consist  of  the  justice  of  the  peace  in  the 
chief  town  of  each  department,  acting  as  ex  officio  presi- 
dent, two  to  four  male  or  female  home  workers,  and  an 
equal  number  of  employers  in  the  industries  named. 
The  boards  of  trade  experts  were  to  be  composed  of  two 
female  workers  and  two  employers  of  the  clothing  trade, 
with  the  justice  of  the  peace  as  president. 

It  is  the  duty  of  the  wages  boards  in  each  district  to 
ascertain  what  is  the  average  wage  customarily  paid  to 
factory  workers  of  the  same  profession  and  of  average 
skill.  On  that  basis  it  has  to  fix  a  minimum  rate  "such 
as  will  enable  a  female  worker  of  average  ability  to  earn 

176 


in  ten  hours  a  wage  equal"  to  this  average  wage.  This 
rate  is  necessarily  a  time-rate. 

Where  a  piece-rate  has  to  be  fixed,  on  account  of  the 
nature  of  the  work,  the  board  of  trade  experts  come  into 
function.  It  is  required  to  ascertain  the  average  time 
necessary  for  the  execution  of  piecework  for  all  the  vari- 
ous articles  and  the  various  classes  of  female  workers 
in  the  occupations  and  districts  subject  to  its  jurisdiction. 
On  the  basis  of  this  ascertainment  of  the  average  time 
required,  a  piecework  rate  is  arrived  at  by  multiplying 
the  time  required  by  the  minimum  time-rate  set  by  the 
wages  board.  These  minimum  piece-rates,  which  prevail 
very  largely  in  the  industries  covered,  are  to  be  revised 
every  three  years. 

When  a  scale  is  fixed,  it  has  to  be  announced  and  a 
period  of  three  months  allowed  for  appeals.  These  ap- 
peals may  be  made  to  a  central  commission  sitting  in 
the  Ministry  of  Labor  in  Paris,  and  composed  of  equal 
numbers  of  employers  and  workers.  If  no  appeal  is  taken, 
then,  after  the  expiration  of  the  period  of  three  months, 
the  minimum  wage  rate  becomes  compulsory  upon 
employers. 

In  the  administration  of  this  law  wages  boards  have 
been  set  up  in  all  departments  and  all  these  boards  have 
fixed  minimum  rates.  Further,  boards  of  trade  experts 
have  been  set  up  in  all  but  four  departments.  Up  to 
October  1,  1918,  these  latter  boards  totaled  295,^  of 
which  123  were  for  dressmaking,  84  for  lingerie,  39  for 
footwear,  and  35  for  embroidery.  In  1917,  the  latest 
year  for  which  complete  information  is  available,  6,445 
employers  and  215,218  employees  were  reported  as  being 
under  the  operation  of  the  law. 

The  result  of  the  scale  of  wages  has  been  that  wages 
of  15  centimes  per  hour  (3  cents)  have  completely  disap- 
peared, while  wages  of  less  than  20  centimes  (4  cents) 
only  remain  where  cost  of  living  is  low.-  Wages  have 
been  appreciably  raised  and  brought  nearer  to  the  actual 
basic  cost  of  living.^ 

Certain  steps  have  been  taken  to  give  minimum  wages 
to  women  employed  on  war  work.'*     Thus,  a  minimum 

1  Bulletin  du  Ministere  de  Travail,  October,  1918,  pp.  362-84. 
^  Duchene,  G.:  "Les  Progres  de  la  legislation  sur  le  minimum  de  salarie." 
Paris,  1918,  p.  62. 
3  Ibid.,  p.  63. 
*/i{i.,  pp.  80-2. 

177 


piecework  list  for  work  on  soldiers'  clothing  was  set  up 
early  in  the  war.  Alinimum  wages  were  named  in  regu- 
lations concerning  the  employment  of  women  in  base 
camps.  The  permanent  commissions  of  arbitration  and 
conciliation  set  up  in  January,  1917,  to  deal  with  disputes 
among  munition  workers  were  required  to  establish  scales 
of  minimum  time  and  piece  wages.  These  are  described^ 
as 

basic  wages  below  which  one  could  not  go,  since  they  repre- 
sented the  sum  considered  indispensable  for  the  existence  of 
the  worker. 

In  these  cases  the  minimum  wages  fixed  were  65  to  75 
centimes  (123^  to  15  cents)  per  hour,  according  to  the 
nature  of  the  work. 

There  is  a  movement  towards  the  establishment  of  a 
minimum  wage  in  other  trades.  In  June,  1917,  the 
Congress  of  Marine  Workers  passed  a  resolution  demand- 
ing the  establishment  of  minimum  wages  for  the  women 
in  that  vocation.  In  that  year,  after  the  strikes  of  the 
months  of  May  and  June,  certain  collective  agreements 
contained  minimum  scales.  In  the  demands  of  unions 
associated  with  the  8-hour  day  there  is  frequent  mention 
of  minimum  wages.  This  was  true  in  the  case  of  the 
miners  and  metal  workers,  two  of  the  strongest  trade 
unions  in  France. 

§  3.     In  Italy 

In  Italy  the  demand  for  a  minimum  wage  has  risen 
more  recently.  It  is  now  associated  with  the  demand 
for  an  8-hour  day  and  is  stronger  in  the  metal  industries 
than  in  those  which  in  France  and  England  have  been 
associated  with  "sweating."  Thus,  in  the  textile  industry 
in  Italy,  no  pressing  demand  for  a  minimum  wage  has  been 
made.  The  workers  in  this  industry  are  mostly  young 
peasant  girls  who  enter  at  an  early  age  and  do  not  remain 
very  long,  as  they  generally  marry.  On  the  other  hand, 
practically  all  the  metal  industries  in  Italy  have  agreed 
to  the  principle  of  the  minimum  wage,  though  at  the 
time  of  the  visit  of  the  Commission  no  endeavor  had  been 
made  to  estabHsh  an  agreed  amount.  The  demand  for 
such  a  wage  is  met  also  in  the  printing  trade. 

'  Rcnard,  G.:  "Repercussions  Econorniques  de  la  Guerre,"  p.  271.  Paris, 
1017. 

178 


A  few  figures  were  obtained  to  show  a  basic  wage  that  is 
being  contemplated  for  the  minimum  wage  of  the  un- 
skilled worker  in  Italy. 

It  has  been  proposed  to  fix  the  wage  of  the  unskilled  work- 
men at  about  13  lire.  Before  the  war  these  men  earned  6  or 
8  lire.    Today  the  skilled  men  earn  about  20  to  23  lire. 

The  question  of  the  minimum  wage  had  not  reached  a 
climax  at  the  time  your  Commission  visited  Italy.  A 
meeting  was  held  at  Turin  on  April  23,  1919,  by  the 
employers  of  most  of  the  industries  in  northern  Italy  for 
the  purpose  of  considering  the  matter  of  minimum  wage. 
It  was  said  at  the  time  that  the  principle  would  un- 
doubtedly be  accepted. 


179 


CHAPTER   XI 

UNEMPLOYMENT 

§  1.     In  Great  Britain 

The  general  problem  of  unemployment  in  Great 
Britain  has  received  a  considerable  amount  of  attention. 
As  an  older  country,  where  opportunities  are  restricted 
as  they  are  not  in  the  United  States,  where  industrial 
stratification  is  more  rigid,  where  the  cycles  of  the 
world's  trade  are  more  keenly  felt,  and  where  there  has 
been  a  surplus  of  labor,  Great  Britain  is  familiar  with 
unemployment  as  a  constantly  recurring  phenomenon. 
To  the  workers,  the  fear  of  unemployment  is  a  constant 
nightmare.  This  fear  was  given  to  the  Commission  in 
many  cases  as  the  chief  reason  why  the  workpeople  had 
restricted  production  and  had  demanded  shorter  working 
hours.  They  were  laboring  under  the  fallacy  of  the 
limited  work-fund  theory,  a  fallacy  which  is  not  confined 
to  the  laborers  of  Great  Britain. 

Action  has  been  taken  in  Great  Britain  to  avoid  at  least 
the  worst  effects  of  unemployment.  The  National 
Insurance  Act,  1911-1916,  contains  provisions  for  un- 
employment insurance  in  certain  highly  skilled  and 
munition  trades,  and  for  a  subvention  to  trade  unions 
that  give  out-of-work  pay.  A  contribution  of  5  pence 
weekly  is  made  by  the  employer,  who  deducts  one-half 
of  it  from  the  employee's  wages.  The  state  contributes 
one  penny  per  head  and  all  the  expenses  of  administration. 
Out  of  the  fund  formed  by  these  contributions,  unemploy- 
ment pay  at  the  rate  of  7  shillings  per  week  is  made 
to  all  who  have  been  involuntarily  unemployed  for  at 
least  six  days. 

The  unemployment  existing  in  Great  Britain  at  the 
time  of  the  visit  of  the  Commission  was  different  in 
character  and  intensity  from  that  which  marked  pre-war 
days.  The  latter  was  generally  related  to  cycles  of  bad 
business  or  to  the  casual  and  disorganized  character  of 
certain  industries.  The  former  was  a  direct  concomitant 
of  the  reconstruction  period.  It  was  an  accompani- 
ment (A  the  huge  turnover  from  war  to  peace. 

180 


The  signing  of  the  armistice  brought  to  a  close  the  period 
of  intense  war-time  activity  in  the  munition  factories 
and  foreshadowed  the  demobilization  of  the  army.  These 
factories,  where  nationally  owned,  were  closed  and  their 
employees  discharged.  Where  privately  owned,  they  had 
to  be  converted  from  their  functioning  as  munition  fac- 
tories to  the  manufacture  of  their  former  products. 

In  the  process  of  conversion,  the  munition  workers 
who  could  not  be  employed  under  the  new  conditions, 
especially  women  and  certain  semi-skilled  men,  were 
thrown  into  unemployment.  Even  the  skilled  hands 
would  remain  unemployed  so  long  and  so  far  as  the  in- 
dustry was  not  able  to  return  speedily  to  peace-time 
production.  At  the  same  time,  a  general  movement  of 
displacement  of  women  by  men  went  on  with  varying 
degrees  of  force,  tending  to  increase  the  number  of  women 
unemployed. 

The  beginning  of  demobilization  had  a  twofold  effect 
upon  the  unemployment  situation.  In  the  first  place,  it 
threw  a  large  number  of  men  upon  a  labor  market  that 
was  already  overloaded,  because  of  the  difficulty  of 
restarting  under  which  industry  was  suffering.  Secondly, 
as  many  employers  had  given  a  pledge  to  take  back  men 
previously  employed,  the  demobilization  of  soldiers  set 
up  a  differentiation  against  civilians,  who  were  discharged 
to  make  room  for  soldiers.  The  figures  for  both  soldiers 
and  civilians  were  large.  At  least  four  million  soldiers 
were  to  be  demobilized,  and  at  least  a  million  civilians 
had  entered  industries  where  there  would  be  no  room  for 
them. 

In  view  of  the  seriousness  of  the  position,  judged 
by  the  numbers  involved  and  the  difficulty  certain  to 
be  met  in  the  readjustment  of  industry,  the  British 
Government  had  three  courses  open  to  it.  It  could 
have  left  each  individual  to  find  employment  unassisted. 
It  could  have  kept  the  munition  factories  busy  until  the 
signing  of  peace.  It  could  give  a  form  of  unemployment 
benefit.  In  view  of  the  large  numbers  who  would  be 
unemployed  and  of  the  large  amount  of  industrial  unrest 
that  was  already  abroad,  the  first  method  was  unsafe. 
The  second  was  wasteful  and  demoralizing.  The  third 
method  was  in  accordance  with  the  principle  of  the  coun- 
try's national  insurance  scheme,  and  was  the  one  adopted. 

The   full    measures    taken    to   adjust   industry    to   the 

181 


new  conditions  of  peace  are  to  be  found  in  an  official 
notice  from  the  Minister  of  Munitions,  dated  November 
13,  1918,  and  addressed  to  contractors,  subcontractors, 
and  workpeople.  This  notice  recognized  that  the  task 
of  transformation  involved  "the  disturbance  and  disloca- 
tion of  industries  and  workshops,"  and  that  "very  large 
numbers  of  workpeople  will  have  to  change  their  employ- 
ment, and  in  many  cases  their  present  abodes." 

The  measures  proposed  were  "solely  intended  to  bridge 
over  the  inevitable  period  of  dislocation."  These  included 
the  abolition  of  overtime,  replacing  piecework  by  time- 
work,  and  reducing  hours  on  the  same,  and  subsidizing 
wages  on  short  time,  where  they  fell  below  a  minimum 
of  30  shillings  per  week  for  men  and  25  shillings  for 
women. 

But  the  most  significant  measure  taken  was  one  provid- 
ing for  unemployment  pay.  This  was  apparently  the 
fully  prepared  scheme  of  the  British  Government,  worked 
out  in  advance  of  the  signing  of  the  armistice.  The 
proclamation  above  referred  to  states: 

To  provide  for  the  abnormal  period  that  must  immediately 
follow  on  the  cessation  of  hostilities,  the  Government  has 
adopted  as  a  temporary  measure  the  following  general  scheme 
of  noncontributory  unemployment  donation,  which  has  been 
laid  before  them  by  the  Minister  of  Reconstruction  in  agree- 
ment with  the  Minister  of  Labour. 

This  scheme  consisted  in  the  payment  of  a  noncon- 
tributory unemployment  donation  for  a  maximum  of 
thirteen  weeks  out  of  the  total  period  of  six  months 
during  which  the  scheme  was  to  be  in  force.  Demobilized 
civil  war  workers  were  to  receive  weekly  benefits  on  the 
following  scale. 

Men  over  eighteen  years  24  shillings. 

Women  over  eighteen  years  20  shillings. 

Boys  12  shillings. 

Girls  10  shillings. 

An  allowance  was  also  made  of  G  shillings  per  week  in 
respect  of  the  first  dependent  child  under  fifteen  years  of 
age,  and  3  shillings  for  each  additional  dependent  child 
under  tliat  age.  On  December  12,  1918,  in  the  midst  of 
the  general  election,  the  allowances  were  increased  thus: 

Men  over  eighteen  years  2!)  shillings. 

Women  over  eighteen  years  25  shillings 

Boys  14  shillings  6  pence. 

Girls  12  shillings  6  pence. 

182 


Towards  the  end  of  February  it  was  clear  that  large 
numbers  of  people  had  not  been  able  to  get  any  employ- 
ment, and  had  consequently  exhausted  the  amount  of 
assistance  they  might  receive  under  the  scheme.  Further, 
it  had  become  plain  that  the  amount  of  the  donation  was 
such  as  to  encourage  idleness,  and  deter  men  and  women 
from  any  assiduous  search  for  employment. 

Under  the  circumstances  the  Government  decided  to 
extend  the  scheme  for  a  further  period  of  six  months, 
with  the  same  restriction  of  pay  to  a  maximum  of 
thirteen  weeks,  but  on  a  lower  scale.  The  donation  for 
men  was  reduced  to  20  shillings,  and  for  women  to  15 
shillings.  This  reduced  scale  has  been  in  operation  from 
May  24th. 

At  the  same  time  members  of  the  forces  upon  demobili- 
zation were  entitled  to  receive,  in  addition  to  other  allow- 
ances, an  out-of-work  donation  during  the  twelve  months 
following  their  demobilization  for  a  maximum  period 
not  exceeding  twenty-six  weeks. 

To  avoid  fraud  several  conditions  were  enforced.  No 
payment  was  made  for  the  first  three  days  of  unemploy- 
ment. Holders  of  unemployment  policies  were  required 
to  sign  them  daily  while  out  of  work.  Juveniles  were 
required  during  the  period  of  this  unemployment  to 
attend  a  course  of  instruction  approved  by  the  Board  of 
Education.  Persons  applying  for  an  additional  policy 
providing  for  unemployment  pay  during  the  second  six 
months  must  satisfy  the  Local  Advisory  Committee  of  the 
Employment  Exchange  that  they  were  normally  in 
employment,  were  genuinely  seeking  work  and  unable  to 
obtain  it.  The  test  imposed  in  respect  to  the  two  latter 
conditions  did  not  necessitate  the  acceptance  of  work  at 
rates  lower  than  the  employment  donation.  Where 
work  was  refused,  employment  officers  were  at  liberty  to 
discontinue  paying  the  employment  grant,  but  the 
applicant  could  appeal  to  a  Court  of  Referees. 

The  number  of  persons  receiving  unemployment  dona- 
tions has  reached  a  high  figure.  The  figures  for  women 
unemployed  rose  rapidly.  By  February  28,  1919,  they 
were  494,471,  and  next  week,  March  7th,  which  marked 
the  culmination  of  the  number  of  civilians  unemployed, 
they  were  494,365. 

In  this  latter  week  the  number  of  men  civilians  unem- 
ployed reached  its  maximum,  234,402. 

183 


Including  boys  and  girls,  the  total  civilians  drawing 
unemployment  pay  in  this  week  of  maximum  figures  was 
790,521.  Of  these,  as  shown  above,  women  formed  62.6 
per  cent,  men  29.6  per  cent. 

At  the  same  time  the  members  of  the  forces  were  being 
demobilized,  but  with  less  speed.  By  May  9th,  the 
figures  among  these  persons  had  reached  their  maximum 
when  they  stood  at  409,959.  The  maximum  number  of 
civilians  and  members  of  the  forces  applying  for  unem- 
ployment pay  was  1,093,400,  a  total  reached  in  the  week 
of  May  2d.  By  the  end  of  June  this  figure  had  been 
reduced  to  606,125,  of  whom  253,282,  were  civilians  and 
372,843  members  of  the  forces. 

The  cost  of  the  scheme  during  the  period  when  the  num- 
bers were  largest  was  estimated  at  £1,000,000  ($4,866,500) 
a  week.  A  total  sum  of  £25,000,000  was  set  aside  for 
the  purpose  of  meeting  the  costs  of  the  experiment. 

It  must  be  understood  that  the  individuals  included 
in  the  weekly  totals  did  not  remain  continuously  un- 
employed. Of  the  civilians  recorded  as  unemployed 
up  to  June  27th,  85  per  cent  of  the  men  and  90  per  cent 
of  the  women  had  ceased  to  draw  the  donation.  The 
corresponding  average  for  demobilized  men  was  85.  In 
other  words,  85  per  cent  of  the  men  demobilized  from 
the  army  and  85  per  cent  of  those  dismissed  from  civilian 
employment  had  again  been  absorbed  into  industry, 
while  90  per  cent  of  the  women  had  found  other  employ- 
ment, not  necessarily  in  industry.^  As  the  number  of 
troops  demobilized  was  officially  given  at  over  four  mil- 
lions and  of  civilians  at  between  one  and  two  millions, 
it  is  apparent  that  the  process  of  adjustment  had  been 
on  a  large  and  successful  scale.  It  is  noteworthy,  also, 
that  employers  were  redeeming  their  promise  to  reinstate 
soldiers  and  sailors  in  their  former  employment,  and  in 
so  doing  had  decreased  the  percentage  of  civilians  obtain- 
ing reemployment. 

The  period  within  which  work  was  found  by  the  un- 
employed was,  in  the  majority  of  cases,  shorter  than  the 
maximum  period  of  thirteen  weeks  during  which  the  dona- 
tion was  payable.  An  analysis  made  by  the  Director  of 
Statistics  of  the  Ministry  of  Labour,  covering  99  per  cent 
of  the  policies  lodged  on  May  2d,  is  of  interest  on  this 
point. ^ 

»  Labour  Gazelle,  Nlay,  1019,  p.  187. 
» Ibid. 

184 


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(M  I>  CO  rt<  O 


185 


Of  the  civilian  total  of  679,292,  only  63,930,  or  a  little 
over  9  per  cent,  were  drawing  donations  for  more  than 
thirteen  weeks  at  the  reduced  rates.  At  the  end  of  June 
the  percentage  had  increased  to  27.4^  To  the  end  of 
April  the  total  number  of  extensions  granted  was  85,529, 
and  the  number  refused,  27,587.  Am.ong  the  latter  were 
22,000  girls  available  for  domestic  service  who  had  refused 
work  of  that  kind.  Most  of  these  refusals  on  the  part  of 
the  girls  available  for  domestic  service  were  referred  to 
Courts  of  Referees  and  17,000  of  them  were  upheld. 

Some  of  the  difficulty  encountered  in  placing  persons 
in  employment  was  due  to  the  action  of  employers  in  offer- 
ing wages  at  pre-war  rates.  Fifty  per  cent  of  the  vacan- 
cies announced  for  officers  from  the  army  were  at  £250 
($1,215+)  a  year.  In  other  cases,  persons  employed  in 
munitions  or  engaged  in  the  trenches  had  lost  their  skill. 
Further,  the  normal  paths  of  advancement  in  industry 
for  young  boys  and  apprentices  had  been  seriously  dis- 
turbed, so  that  a  large  measure  of  training  was  required 
before  some  of  these  could  function  efficiently  in  industry. 

But  the  great  difficulty  was  that  industry  was  stagnant. 
Some  of  Great  Britain's  largest  markets  were  closed  to 
her,  such  as  the  Central  Empires  and  Russia.  Distant 
markets  like  China,  Japan,  Australia,  and  New  Zealand 
were  practically  shut  off  by  lack  of  shipping.  Engineer- 
ing works  were,  to  a  large  extent,  idle.  There  were  at 
least  100,000  men  out  of  work  in  that  industry,  and  only 
2,693  vacancies  had  been  notified  to  exchanges.  Un- 
employment was,  therefore,  correlated  with  stagnation  in 
industry. 

Criticism  of  the  scheme  came  from  various  sources. 
To  some  men  it  was  a  dole,  a  relic  of  charity  and  the  old 
Poor  Law.  To  others  it  was  a  rash  and  thriftless  expendi- 
ture of  the  public  money,  a  "wild-cat"  measure  that  would 
not  exert  its  anticipated  influence  in  stopping  industrial 
unrest  and  unemployment.  Some  denounced  it,  quite 
rightly,  in  respect  to  the  earlier  payments  made,  as  an 
obvious  inducement  to  idleness.  It  should  be  noted  that 
in  practice  it  did  not  operate  powerfully  nor  in  a  large 
number  of  cases,  to  prevent  men  seeking  work.  Much 
criticism  was  directed  against  the  large  number  of  women 
included  in  its  provisions,  the  assertion  being  made  that 
the  majority  of  them  were  not  employed  before  the  war, 

'  Labour  Gazette,  July,  1919,  p.  282. 

186 


were  consequently  returning  to  their  domestic  duties, 
and  had  no  rightful  claim  to  an  unemployment  donation. 
Some  justification  for  this  criticism  is  found  in  the  fact 
that  only  52  per  cent  of  the  women  applied  for  an  exten- 
sion of  their  donation,  and  of  that  proportion  30  per  cent 
were  rejected.  But,  on  the  other  hand,  this  number 
was  stated  by  the  Minister  of  Labour  as  only  amounting 
to  "roughly  40,000,"  or  10  per  cent  of  the  total  number 
of  women  drawing  unemployment  pay.  At  the  same 
time  it  must  be  remembered,  in  considering  the  number 
of  women  unemployed,  that  the  cotton  industry  was 
suflFering  seriously  from  the  eflfects  of  the  blockade. 
The  total  unemployed  therein  was  100,000,  at  least  60 
per  cent  of  whom  were  women.  Further,  a  total  of 
66,000  women  had  been  placed  In  some  form  of  domestic 
service  since  the  armistice. 

On  the  labor  side  the  scheme  was  denounced  as  inade- 
quate. The  donation,  especially  after  the  announcement 
of  its  reduction,  was  declared  to  be  too  small.  The 
reduction  was  received  with  bad  grace.  The  administra- 
tion of  the  act  was  condemned  as  harsh.  It  was  said 
that  women  were  being  forced  back  into  the  sweated 
trades.  It  was  held  that  the  Government  should  do 
something  to  start  industry  moving,  and  to  that  end 
should  set  the  national  factories  in  operation  under 
state  control  and  carry  forward  its  program  of  housing 
and  public  works. 

Their  complaint  was  that  the  Government  had  limited 
themselves  in  their  policy  merely  to  the  plan  of  paying  out 
state  benefit.  They  had  not  taken  steps  to  find  out  what  the 
worker  wanted.  His  first  claim  was  to  work,  and  his  claim 
to  state  money  came  after  the  state's  inability  to  find  him 
work. 

There  were  factories  and  workshops  and  many  material 
means  available  which  could  be  brought  into  close  touch  with 
Labour,  which  was  willing,  if  the  Government  could  overcome 
their  objection  to  any  kind  of  organized  effort,  to  provide  work 
instead  of  unemployment  benefit.  It  was  objected  that  this 
would  not  produce  economic  results,  but  it  would  pay  the 
Government  even  to  have  production  at  a  loss  rather  than 
paying  out  money  week  by  week  for  providing  nothing.  It 
not  only  provided  nothing,  but  brought  in  its  train  certain 
disadvantages  harmful  to  the  state  as  well  as  detrimental  to 
individuals.^ 

^  J.  R.  Clynes,  M.P.,  speech  in  House  of  Commons,  April  29,  1919,  reported 
in  The  Times,  April  30th. 

187 


While  the  Government  did  not  take  any  action  to 
operate  the  national  factories,  preferring  rather  to  sell 
them  to  private  enterprise,  it  made  considerable  sums 
available  for  housing,  repairs  to  roads,  erection  of  gas- 
works and  waterworks,  and  other  schemes. 

The  time  is  not  opportune  for  a  judgment  upon  the 
scheme.  It  is  a  temporary  measure,  a  part  of  the  long 
and  difficult  process  of  readjustment  to  peace  conditions. 
The  general  tone  of  public  criticism  is  not  averse  to  it  on 
principle.      The  Times,  in  an  editorial,^  says: 

Indeed,  the  case  for  it  as  an  interim  policy  between  war  and 
peace  was  overwhelming,  and  was  hardly  challenged  in  the 
House  yesterday. 

As  a  temporary  measure  it  has  ensured  a  certain  amount 
of  industrial  peace.  But  a  distinct  fear  was  abroad  that 
it  would  become  a  permanent  feature  and  a  continued 
monetary  burden  upon  the  country.  No  section  of 
opinion  was  inclined  to  tolerate  such  a  result. 


§  2.     In  France 

There  is  normally  a  shortage  of  labor  in  France,  so  that 
the  question  of  unemployment  has  never  loomed  large 
there.  It  was  necessary  before  the  war  to  import  work- 
men for  seasonal  demands  from  Belgium  and  Italy.  If 
industry  can  once  more  get  started  toward  its  restoration, 
whatever  idle  labor  there  is  in  France  will  be  quickly 
absorbed.  Demobilization  plans  have  been  so  arranged 
as  to  permit  this  absorption  with  the  least  possible  degree 
of  idleness. 

One  large  manufacturer  told  the  Commission: 

There  will  be  plenty  of  work  for  common  labor  on  the 
highways,  railroads,  buildings,  etc.,  but  I  am  much  concerned 
about  the  skilled  men. 

The  Government  has  appropriated  some  6,000,000 
francs  for  public  works,  and  engineers  have  been  released 
from  the  army  in  order  to  get  the  work  of  restoring  the 
devastated  areas  under  way. 

There  has  been  in  I'Vancc  the  fully  equipped  machinery 
for  dealing  with  unemployment,  in  the  Bourses  dc  Travail, 
or  labor  exchanges,  of  which  there  are   144  throughout 

'  April  30,  1919. 

188 


the  country,  with  486,404  "adhering  effective  syndicats."^ 
These  organizations,  described  in  detail  elsewhere,^  are  in 
touch  with  the  whole  situation.  They  are  institutions 
established  by  organized  labor  itself  and  controlled  by  it. 
They  supplanted  the  previous  Government  exchanges. 
Consequently,  there  has  been  no  need  for  a  war  emergency 
organization  to  care  for  unemployment  problems. 

The  real  problem  in  France  is  to  get  business  started; 
it  is  a  problem  of  finance.  If  raw  materials  and  coal  can 
be  had,  if  the  wrecked  plants  in  the  occupied  territories 
can  be  set  running,  the  unemployment  problem  will 
disappear.  In  fact,  there  may  then  arise  a  situation 
wholly  reversed;  it  may  become  a  question  of  where 
sufficient  labor  power  can  be  had.  It  was  estimated  to 
your  Commission  that  about  25  per  cent  of  the  cotton 
mill  capacity  should  be  in  condition  to  resume  operations 
in  six  months,  that  the  woolens,  lace,  carpet,  and  silk 
factories  should  have  developed  about  the  same  relative 
capacity  in  the  same  period.  At  the  time  of  our  visit 
many  manufacturers  were  having  great  difficulty  in 
financing.  The  Government  policy  in  restricting  imports 
was  further  aggravating  the  difficult  situation. 

§  3.     In  Italy 

Unemployment  Vv^as  a  vital  problem  in  Italy  when  your 
Commission  visited  that  country.  There  was  need  of 
coal  and  raw  materials  with  which  to  start  the  factories 
and  so  increase  the  labor  demand.  The  social  and 
political  situation  was  such  that  the  Government  did  not 
dare  to  demobilize  her  troops  and  let  them  return  to  a 
jobless  civil  life.  Fortunately  Italy  is  essentially  an 
agricultural  country  and  does  not  present  an  unemploy- 
ment problem  of  the  character  found  in  Great  Britain. 

The  Italian  situation  is  briefly  summed  up  in  the  follow- 
ing words  from  an  Italian  thoroughly  conversant  with 
conditions: 

The  chief  difficulty  confronting  Italy  was  that  of  the 
employment  of  the  four  million  soldiers  who  would  soon  be 
demobilized.  It  was  quite  probable  that  emigration  from  the 
country  would  set  in  for  two  reasons.  First,  Italian  agri- 
culture could  not  expand  so  as  to  employ  this  large  army,  nor 

^  Statistique  generale,  p.  136. 

*  Cf.  "Political  Influences  in  French  Labor  Movement,"  Chap.  XVIII,  p.  272. 

189 


were  the  industries  of  Italy  in  such  a  condition  as  to  absorb 
them.  Italy  was  in  need  of  raw  materials,  and  of  financial 
credit  which  would  enable  industry  to  be  restarted.  Secondly, 
emigration  to  neighboring  countries  for  seasonal  periods  had 
been  going  on  before  the  war.  During  the  war  60,000  laborers 
had  been  sent  to  France,  and  there  is  anticipated  an  extension 
of  this  demand  for  Italian  labor  in  Belgium  and  devastated 
France. 

Like  Great  Britain  and  France,  Italy  instituted  a 
system  of  "unemployment  donations."  Said  one  author- 
ity to  a  member  of  your  Commission: 

At  the  present  time,  Italy,  like  other  countries,  is  paying 
high  unemployment  donations.  They  are  so  high  that  it  has 
had  the  effect  of  bribing  men  to  be  lazy  as  long  as  they  received 
these  sums. 

Prior  to  the  war,  the  placing  of  labor  in  Italy  was  left 
to  private  enterprise;  that  is,  the  Individual  Industrial 
concerns  looked  after  their  Interests,  or  unauthorized  (by 
the  Government)  bureaus  or  labor  exchanges  performed 
this  service.  There  were  a  few  exceptions.  In  Lom- 
bardy  and  Romagna,  for  Instance,  labor  organizations  had 
their  own  exchanges.  It  Is  estimated  that  In  Milan  these 
organizations  placed  about  50  per  cent  of  the  workmen. 
In  Romagna,  the  labor  organizations  "monopolized 
entirely  the  concession  of  labor  to  conductors  of  land 
estate  Industries."  During  the  war  Italian  Industry 
like  the  French  passed  under  military  control.  A  decree 
of  November  17,  1918,  provided  that  in  those  regions 
where  private  Initiative  does  not  develop  agencies  for 
exchange  of  labor,  special  commissions  for  the  "channeling 
of  labor"  are  to  be  created  by  municipal  and  provincial 
administrations.  These  are  to  be  made  up  of  an  equal 
number  of  representatives  of  the  Industrial  and  of  the 
working  classes.  There  Is  to  be  In  Rome,  under  the 
direction  of  the  Ministry  of  Industry  and  Labor,  a  central 
office,  a  clearing  house  of  Information  for  the  country. 

Under  this  decree  the  Association  of  Anonymous  Share 
Companies  (Societa  Italiana  per  Azioni)  and  the  General 
Confederation  of  Labor  {Confederazione  Generale  del 
Lavoro) ,  one  the  chief  manufacturers'  association,  the 
other  the  most  powerful  labor  organization  in  Italy, 
have  together  organized  twenty-four  "placing  agencies" 
throughout  the  country. 

190 


CHAPTER  XII 

HOUSING 

§  1.     In    Great    Britain 

The  housing  problem,  one  of  the  most  urgent  of  the 
reconstruction  measures  facing  Great  Britain,  is  inti- 
mately related  to  the  industrial  situation.  This  rela- 
tionship is  of  a  twofold  order. 

In  the  first  place,  the  want  of  sufficient  and  suitable 
housing  accommodation  was  regarded  as  a  large  factor 
in  industrial  unrest.  This  was  evidenced  during  the 
war,  especially  in  such  areas  as  were  specially  called  upon 
for  war  work.  Thus  the  report  of  the  Commission  of 
Inquiry  into  Industrial  Unrest  mentions  the  Newcastle, 
Barrow,  London,  and  Southeast  districts,  and  Wales 
and  Scotland  as  areas  where  the  disturbing  influence  of 
an  acute  housing  problem  was  manifest.  Houses  there 
were  scarce,  and  living  conditions,  accentuated  by  the 
patriotic  necessity  of  taking  lodgers,  were  a  burden  and  an 
irritation.  Nor  did  the  cessation  of  the  war  do  anything 
but  increase  this  unrest.  Demobilized  soldiers  returned 
to  find  no  houses  in  which  to  live.  In  city  and  country 
alike,  younger  people,  looking  towards  marriage,  found  it 
difficult  to  obtain  homes  and  joined  in  the  demands  for 
better  housing  conditions. 

In  the  second  place,  the  housing  problem  is  related  to 
that  of  unemployment.  All  through  the  war  both 
problems  were  obvious  and  were  frequently  discussed 
together.  It  was  held  that  the  pressing  nature  of  the 
housing  question  should  lead  to  priority  in  its  treatment 
after  the  war.  This  would  tend  to  lessen  the  degree  of 
unemployment  by  setting  the  wheels  of  industry  moving 
in  the  building  trades.  Carpenters,  joiners,  brickmakers, 
bricklayers,  plasterers,  glaziers,  plumbers,  and  others, 
many  of  them  members  of  trades  seasonal  in  nature, 
often  with  an  abnormal  measure  of  unemployment, 
would  be  set  to  work,  and  their  consuming  power  would 
assist  in  finding  employment  for  others.  The  discussion, 
therefore,  of    housing   has    been    associated    particularly 

191 


with   the   questions   of    industrial  unrest   and   of   unem- 
ployment. 

The  housing  problem  dates  from  before  the  war.  The 
British  census  report  of  1911  shows  a  serious  shortage  of 
housing  accommodation  as  measured  by  "overcrowding." 
In  that  report  the  number  of  persons  in  England  and  Wales 
living  more  than  two  to  a  room  was  over  3,100,000,  or 
one-tenth  of  the  population.  In  Scotland  the  condition 
was  even  worse.  On  the  English  standard  of  over- 
crowding, the  percentage  of  persons  in  Scotland  living  in 
overcrowded  conditions  was  nearly  one-half  the  popu- 
lation. It  should  be  added  that  this  shortage  of  housing 
accommodation  was  not  confined  to  the  cities;  it  was 
even  more  evident  in  rural  centers.  An  estimate  pre- 
pared in  1912  showed  a  need  in  rural  areas  of  at  least 
120,000  houses. 

The  difficulty  experienced  during  the  war  was  that  of 
finding  shelter  in  certain  areas  for  the  large  numbers  of 
incoming  war  workers,  and  of  preventing  the  increased 
demand  for  houses  from  raising  rents  to  a  prohibitive 
figure.  Certain  older  districts,  such  as  Woolwich  and 
Coventry,  increased  their  population  enormously,  while 
areas  hitherto  unused  for  industry,  such  as  Gretna  Green, 
became  sites  for  large  national  factories. 

The  extent  of  the  problem  at  the  conclusion  of  the  war 
has  been  carefully  estimated.  The  Reconstruction  Com- 
mittee early  in  1917  chose  six  of  its  members  to  act  as  an 
Advisory  Housing  Panel  with  an  invitation  "to  complete 
a  review  of  the  housing  question  as  it  was  likely  to  present 
itself  at  the  close  of  the  war,  and  to  prepare  a  memorandum 
on  the  subject."^  The  figures  accepted  and  published 
by  this  committee  refer  to  houses  not  above  a  rental  value 
of  8  shillings  a  week.  Among  houses  of  this  value,  there 
was  an  estimated  deficiency  of  new  buildings  that  by  the 
end  of  1917  would  amount  in  England  and  Wales  alone 
to  175,000  houses.  This  deficiency  was  due  entirely  to 
the  cessation  of  building  during  the  war.  The  normal 
annual  increase  required  to  meet  the  needs  of  the  growing 
population  and  replace  old  structures  was  estimated  at 
75,000.  If  the  war  ended  in  1917  a  total  of  250,000 
houses  of  the  class  specified  would  need  to  be  built  in  1918. 
So  by  calculation  325,000  houses  would  be  needed  in 
1919,  and  if  nothing  were  done  in  that  year  towards  an 

'  "Housing  in  England  and  Wales,"  London,  1919,  cd.  9087. 

192 


alleviation  of  the  scarcity,  400,000  would  be  needed  in 
1920.  In  addition  it  was  held  that  at  least  50,000  new 
cottages  would  be  needed  in  rural  areas. 

In  Scotland  the  number  of  new  houses  required  was 
set  at  a  minimum  of  120,000  by  a  Royal  Commission 
appointed  to  inquire  into  the  Housing  of  the  Industrial 
Population  in  Scotland. 

The  above  calculations  take  no  account  of  houses  that 
were  not  fit  for  habitation.  In  1914  these  were  estimated 
for  England  and  Wales  at  not  less  than  400,000.  In 
Scotland  they  could  not  be  less  than  100,000.  In  sum, 
the  total  number  of  houses  called  for  in  Great  Britain, 
including  new  houses  and  those  to  replace  existing  in- 
sanitary structures,  does  not  fall  far  short  of  a  million. 

The  causes  of  this  scarcity  which  has  been  cumulative 
during  at  least  ten  years  must  be  examined,  since  they 
determine  in  part  the  financial  aspect  of  the  present 
problem.  The  first  reason  given^  is  that  the  Finance  Act 
of  1910,  taxing  the  unearned  increment  on  land,  had 
discouraged  the  speculative  builder  and  other  investors 
in  real  estate.  Further,  real  estate  had  become  less 
tempting  as  an  investment  with  the  increase  in  the 
earning  power  of  securities.  At  the  same  time,  even 
before  the  war,  building  materials  had  increased  in  price, 
thus  discouraging  the  building  of  new  houses.  A  further 
factor  in  the  shortage  which  existed  prior  to  the  war  had 
been  the  increased  activity  of  the  sanitary  authorities 
under  the  Housing  and  Town  Planning  Act,  1909.  This 
act  required  landlords  to  see  that  their  houses  were 
reasonably  fit  for  human  habitation,  and  gave  local 
authorities  the  right  to  require  the  carrying  out  of  any 
repairs  deemed  necessary  or  to  close  the  house  against 
tenants. 

Certain  measures  had  been  taken  to  deal  with  the  pre- 
existing scarcity.  Outside  of  private  enterprise,  which 
had  been  responsible  for  the  erection  of  95  per  cent  of 
the  houses  built  prior  to  the  war,  government  action  had 
been  sanctioned  in  two  successive  legislative  measures. 

The  first  of  these  was  the  Housing  of  Working  Classes 
Act,  1890,  which  allowed  the  Local  Government  Board 
to  advance  money  to  local  authorities  (municipalities  and 
rural   district  councils)   for   the   erection  of  houses.     In 

^  Rowntree,  B.  Seebohm,  and  Pigou,  A.  C. :  "Lectures  on  Housing,"  pp.  8-9. 
Manchester,  1914. 

193 


1909  the  powers  of  the  local  authorities  under  this  act 
were  extended,  while  the  Local  Government  Board  was 
authorized  to  act  where  the  local  authorities  were  reluctant 
to  move.  This  extended  power  was  conferred  by  the 
Housing  and  Town  Planning  Act,  1909. 

The  latter  act  was  coming  more  and  more  into  favor 
prior  to  the  war,  and  the  war  pressure  for  housing  accom- 
modation increased  the  demand  for  loans.  The  move- 
ment in  amount  of  money  loaned  to  local  authorities  for 
the  financial  years  1911-17  inclusive  is  shown  in  the  fol- 
lowing table  :^ 

Year  ending  March  31st  Amount  Loaned 

1911  £101,210 

1912 £229,011 

1913 £395,432 

1914 £759,440 

1915 £1,125,176 

1916 £502,904 

1917 £58,531 

Another  act  making  provision  for  government  aid 
was  passed  on  August  10,  1914,  a  few  days  after  war  was 
declared.  This  act,  however,  was  regarded  as  a  meas- 
ure for  dealing  with  unemployment,  and  although  an 
expenditure  of  £4,000,000  was  authorized,  the  powers 
granted  under  the  act  had  to  be  exercised  within  a  year 
from  its  passing.  The  fact  that  the  period  of  unemploy- 
ment for  which  provision  had  been  made  was  short  and 
the  various  restrictions  under  the  act  combined  to  make 
it  inoperative. 

While  much  was  being  done  by  local  authorities  under 
the  acts  of  1890  and  1909,  to  remodel  unsightly  tenements 
and  build  new  ones,  mainly  in  city  areas,  there  was  a 
growth  of  co-operative  housing  schemes  and  a  movement 
towards  "garden  cities."  Mention  has  been  made 
elsewhere  in  the  report  of  the  efforts  of  Sir  William  Lever 
f  now  Lord  Leverhulme)  at  Port  Sunlight  and  of  the 
Cadburys  at  Bourncville.^  At  the  same  time,  however, 
schemes  more  definitely  co-operative  were  being  launched 
at  Letchworth,  Hampstead,  Ealing,  and  elsewhere.  A 
description  of  that  at  Letchworth  will  illustrate  the 
method  and  its  significancs.  A  company  was  formed, 
shares  being  of  the  value  of  £10,  interest  thereon  being 
limited  by  law,  as  in  the  case  of  all  public  utility  societies, 
to  5  per  cent  per  annum.  This  company  bought  up  at 
first  3,800  acres  (later  adding  700  acres)  of  agricultural 

'  Quoted  in  Labour  Yearbook,  1919,  p.  209. 
»Cf.  Ch.  XIV,  §7,  pp.  221-23. 

194 


land  In  Hertfordshire,  thirty-four  miles  from  London.  A 
railway  ran  through  the  land  which  could  be  utilized  for 
factories  as  well  as  for  homes.  The  city  was  planned  so 
as  to  allot  1,500  acres  to  the  town  proper,  leaving  3,000 
acres  of  agricultural  land  for  small  farms  and  small  hold- 
ings.    An  area  near  the  railways  was  reserved  for  factories. 

Not  only  has  the  company  developed  the  land  and 
built  the  city,  but  It  has  also  established  gas,  water,  and 
electric  light,  provided  sewers  and  organized  domestic 
transportation.  At  the  same  time  It  has  set  out  to  develop 
the  factory  area.  Such  is  the  situation  of  the  town  that 
manufacturers  who  wish  to  establish  factories  must  bring 
their  operatives  with  them  and  house  them  in  the  city. 
The  results  have  shown  that  there  Is  no  necessary  con- 
nection between  manufacturing  and  the  dismal,  drab 
conditions  of  many  of  England's  largest  cities.  Manu- 
facturers have  come  to  Letchworth;  about  thirty  in- 
dustries have  already  been  established.  Their  operatives 
are  housed  in  the  city,  paying  rents  within  their  reach  and 
enjoying  the  amenities  of  civilization.  The  city  built 
to  accommodate  35,000  people  has  now  over  10,000  in- 
habitants. It  represents  one  of  many  attempts  by  means 
of  co-operative  enterprise  to  find  accommodation  under 
healthier  conditions  for  the  overcrowded  inhabitants  of 
English  and  Scottish  cities. 

The  first  measures  during  the  war  were  preventive  In 
character.  To  prevent  rents  from  being  raised  unduly 
under  the  urgent  need  of  housing  accommodation,  there 
was  passed  in  1915  and  amended  in  1917  an  act  known 
as  The  Increase  of  Rent  and  Mortgage  Interest  (War 
Restrictions)  Act,  1915.  This  was  made  to  apply  to 
houses  below  a  certain  "standard  rent,"  that  term  being 
defined  as  the  rent  at  which  the  premises  were  let  on  or 
before  the  day  preceding  the  declaration  of  war.  By  its 
provisions  the  rent  of  a  house  or  of  a  room  could  not  be 
increased  above  the  standard  rent  unless  the  landlord 
had  made  improvements,  and  in  that  case  the  rent  could 
not  be  Increased  more  than  6  per  cent  of  the  capital  value 
of  the  improvements.  No  tenant  could  be  ejected  while 
the  proper  rent  was  paid  and  the  conditions  of  the  tenancy 
observed,  except  for  certain  specified  causes. 

The  next  step  taken  by  the  Government  was  the 
erection  of  model  housing  centers  In  certain  places  where 

195 


large  numbers  of  munition  workers  had  congregated. 
In  some  cases  these  were  built  near  older  centers,  in  other 
cases,  as  at  Gretna,  in  parts  that  were  formerly  almost 
uninhabited.  The  best  known  of  the  former  is  that  of 
Well  Hall  in  Eltham,  Kent,  about  a  mile  from  Woolwich 
arsenal.  This  consists  entirely  of  permanent  dwellings 
for  workmen,  and  from  the  architectural  and  social 
points  of  view  is  one  of  the  most  remarkable  examples 
of  housing  in  Great  Britain.  The  whole  cost  of  the 
construction  of  the  scheme  was  borne  by  the  Gov- 
ernment. The  rentals  range  from  7  shillings  for  a  two- 
roomed  house  with  scullery  and  bath,  to  15  shillings  and 
6  pence  for  a  four-roomed  house  with  similar  accommo- 
dation. Where  shelter  of  a  temporary  or  semi-temporary 
nature  had  to  be  provided  for  war  Vv^orkers,  this  was 
done  by  building  the  shell  of  a  permanent  house  and  using 
the  undivided  interior  for  a  hostel.  In  certain  other 
cases,  however,  as  at  Eastriggs,  temporary  accommoda- 
tion was  built  more  extensively.  In  general,  however, 
the  government  policy  was  to  avoid  the  building  of 
temporary  structures,  because  they  tended  to  remain  and 
degenerate  into  slums.  Consequently,  such  efforts  as 
those  at  Gretna  and  Well  Hall  remain  as  permanent 
contributions  to  the  problem  of  providing  more  and 
better  houses,  whether  in  proximity  to  cities  or  in  new 
and  hitherto  unutilized  areas. 

Discussion  of  the  difficulties  which  in  their  sum  form 
the  housing  problem  has  been  searching  in  character  and 
nation-wide  in  extent.  This  has  shown  that  the  obsta- 
cles to  a  rapid  building  program  are  mainly  financial  in 
nature.  Stress  is  laid  on  the  urgent  national  necessity. 
Houses  are  needed  in  large  quantities.  Every  possible 
agency  is  to  be  put  into  operation  and  turned  towards 
the  building  of  houses.  It  is  generally  conceded  that 
the  problem  is  too  large  for  unaided  private  enterprise. 
As  a  matter  of  practice,  builders  at  the  close  of  the  war 
were  giving  their  chief  attention  to  the  erection  of  fac- 
tories and  workshops.  In  1917  the  value  of  such  build- 
ings erected  was  more  than  nine  times  that  of  dwellings 
built  in  the  same  year,  whereas  in  1911  the  value  of 
dwellings  erected  was  three  times  that  of  factories.  The 
erection  of  houses  was  no  longer  a  profitable  investment. 
Capital  was  scarce,  rates  of  interest  and  cost  of  materials 
and  wages  were  high.  Elouses  were  at  least  twice  as 
expensive  to  build  as  before  the  war,  and  I  lie  increased 

196 


cost  was  reflected  In  the  rent.  Where  tenants  formerly 
paid  8  shillings  a  week,  the  rent  would  now  reach  towards 
£1  a  week.  Such  a  rent  was  beyond  the  reach  of  the 
majority  of  English  artisans,  and  anything  lower  was  a 
certain  loss  to  builders  and  investors.  Further,  values 
were  likely  to  drop  in  the  course  of  several  years,  and 
houses  built  at  the  "top"  of  the  market  would  be  certain 
to  shrink  in  both  capital  and  rental  value.  It  was  these 
reasons  which  have  produced  the  general  opinion  in 
Great  Britain  that  the  housing  problem  is  too  vast  and 
too  risky  for  unaided  private  enterprise. 

With  private  enterprise  thus  ruled  out  by  the  abnormal 
financial  difficulties  of  the  situation,  public  opinion  in 
England  has  accepted  the  housing  problem  as  one  of  its 
post-war  burdens.  The  state  had  to  bear  the  loss  likely 
to  be  involved  in  the  building  of  so  many  houses  at  the 
"top"  of  the  market.  It  had  to  finance  present  schemes 
so  that  private  builders  can  contract  for  them.  It  had  to 
make  arrangements  whereby  the  period  of  transition  to 
normal  values  can  be  safely  crossed  alike  by  rating 
authorities  and  individual  tenants.  This  is  the  principle 
underlying  the  Housing  and  Town  Planning  Act  intro- 
duced into  the  British  House  of  Commons  on  April  7,  1919. 

This  act  makes  it  the  duty  of  a  local  authority,  such 
as  a  municipality,  within  three  months  after  the  passing 
of  the  act,  to  submit  a  scheme  for  dealing  with  whatever 
rehousing  is  necessary  within  the  area  over  which  it 
has  jurisdiction.  Where  such  a  scheme  is  submitted  and 
accepted  it  must  be  carried  out  by  the  local  authority. 
If  no  scheme  is  submitted  the  Local  Government  Board 
can  require  such  a  scheme  to  be  prepared  or,  in  default, 
prepare  the  scheme  and  have  it  carried  out.  These  meas- 
ures are  intended  to  insure  that  no  one  of  the  1,800  local 
authorities  in  England  and  Scotland  can  evade  its  obli- 
gations under  the  bill,  which  extend  not  merely  to  new 
houses  but  also  to  provision  for  dealing  with  unsatis- 
factory houses  and  slum  areas. 

The  financial  provisions  of  the  bill  are  intended  to  meet 
those  conditions  previously  described  which  made  the 
task  too  onerous  for  private  enterprise  and  too  risky  for 
speculative  builders.  When  a  scheme  is  approved,  the 
Local  Government  Board  undertakes  to  finance  it  for 
a  provisional  period,  estimated  at  seven  years,  during 
which  an  annual  subsidy  will  be  paid  by  the  Government 

197 


towards  interest  and  upkeep,  provided  the  local  authority 
has  expended  at  least  the  equivalent  of  a  municipal  rate 
of  a  penny  in  the  pound.  At  the  end  of  the  provisional 
period,  when  values  have  reached  a  normal  level,  a  revalua- 
tion would  take  place,  and,  if  necessary,  a  subsidy  would 
still  be  paid  so  that  the  annual  charge  upon  local  authori- 
ties would  not  exceed  the  penny  rate.  It  was  hoped  that 
at  the  end  of  this  period  rent  that  would  bring  a  return 
on  the  investment  could  be  charged. 

In  other  words,  the  financial  provisions  mean  that  the 
Government  finds  a  large  proportion  of  the  money  needed 
to  commence  housing  undertakings,  lends  it  for  a  period 
of  from  thirty  to  eighty  years,  and  bears  the  loss  in- 
volved in  building  at  the  "top"  of  the  market.  The 
local  authorities  are  required  to  bear  the  burden  only  up 
to  the  limit  of  the  proceeds  of  a  penny  rate. 

Assistance  was  also  to  be  given  both  to  the  formation 
and  the  financing  of  what  are  known  as  public  utility 
societies.  These  societies  had  always  been  able  to 
borrow  two-thirds  of  their  necessary  capital  from  the 
Government  at  the  lowest  market  rate  of  interest.  By 
the  new  act  they  were  to  be  enabled  to  borrow  up  to 
three-fourths  of  their  needed  capital,  and  would  receive 
a  subsidy  equal  to  40  per  cent  of  the  annual  loan  charges. 
The  significance  of  this  aspect  of  the  problem  lies  in 
the  fact  that  many  firms  and  corporations  are  ready  to 
assist  towards  the  housing  of  the  workers  necessary  to 
the  development  of  their  industry  by  taking  stock  in 
these  societies.  The  movement  towards  recognition  of 
public  utility  societies  as  factors  in  the  solution  of  the 
housing  problem  arose  from  the  Federation  of  British 
Industries,  which  pointed  out  how  employers  would 
thereby  be  enabled  to  contribute  towards  the  provision  of 
accommodation  for  their  workpeople. 

For  the  supply  of  materials  much  is  expected  from  the 
Ministry  of  Supply.  The  chief  difficulty  concerned 
bricks,  for  the  brickyards  of  the  country  had  been  almost 
entirely  closed  during  the  war  and  needed  time  to  get  into 
working  order.  The  Ministry  of  Supply  has  undertaken, 
however,  to  supply  to  local  authorities  and  public  utility 
societies  such  articles  as  bricks,  drainpipes,  cement,  and 
glass.  It  was  asking  manufacturers  also  for  the  wholesale 
production  at  the  lowest  possible  rate,  of  internal  fittings, 
and  was  suggesting  the  staiidardi/.aticjn  of  certain  fixtures 

198 


such  as  doors,  windows,  and  furniture,  in  order  to  cheapen 
production  without  diminishing  artistic  effect. 

It  should  be  added  that  a  Women's  Housing  Sub- 
Committee  had  been  appointed  early  in  the  history  of 
the  Adinistry  of  Reconstruction,  and  had  given  attention 
to  such  matters  in  the  planning  of  houses  as  were  essen- 
tial from  the  point  of  view  of  health  and  the  convenience 
of  the  housewife.  The  recommendations  of  this  sub- 
committee covered  a  wide  range  of  domestic  and  social 
conveniences.  Some  of  these  had  received  attention  in 
the  planning  of  Gretna  and  Well  Hall,  while  all  of  them 
are  likely  to  receive  attention  in  the  new  plans.  In  so  far 
as  the  stress  laid  on  them  indicates  a  distinction  between 
the  older  and  the  newer  style  of  housing,  their  acceptance 
reveals  a  wider  idea  of  comfort  and  an  increase  in  the 
standard  of  life  among  the  working  classes  of  Great 
Britain. 

The  housing  problem  in  Great  Britain  should  be  recog- 
nized as  one  of  considerable  size  and  significance.  Its 
solution  is  expected  to  assist  in  reducing  unemployment 
in  the  building  trades  and  in  calming  industrial  unrest. 
The  financial  position,  with  Interest  rates  high  and  labor 
and  materials  at  a  high  price,  is  such  that  real  estate 
investment  represents  a  certain  loss  through  decline  in 
values.  Private  enterprise  is  thus  precluded  from  the 
field,  while  public  opinion,  endorsed  in  this  instance  by 
such  a  manufacturers'  organization  as  the  Federation  of 
British  Industries,  is  opposed  to  the  subsidizing  of  the 
private  contractor.  Steps  have  been  taken  accordingly 
for  the  Government  to  undertake  the  financial  loss  and 
initiate  and  compel  an  adequate  effort  towards  the  solu- 
tion of  the  housing  problem.  This  effort  is  receiving  the 
endorsement  of  Parliament  and  of  every  section  of  the 
nation. 


§  2.     In  France  and  Italy 

In  these  countries  the  problem  of  housing  is  not  indus- 
trial, but  social;  it  is  not  the  result  of  intense  industrial 
development,  but  of  war  devastation.  In  consequence, 
its  solution  does  not  lie  in  a  readjustment  of  industrial 
relationships,  but  in  a  successful  means  of  obliterating 
the  ravages  of  war.  There  is  none  the  less  a  responsibility 
on  Government  in  this  matter.     A  discussion  of  It,  how- 

199 


ever,  lies  outside  the  bounds  of  our  investigation.  We 
were  informed  that  the  French  Government  was  assist- 
ing in  the  building  of  houses  both  large  and  small  for 
the  working  people.  It  is  true  that  where  in  France  new 
munition  factories  were  built  in  new  localities,  workmen 
were  hurried  to  these  places  in  such  numbers  that  they 
could  not  be  housed  decently.  Workmen  were  separated 
from  their  families,  slept  in  insanitary  rooms,  in  relays, 
and  endured  many  hardships  of  this  character."^  Never- 
theless, it  must  be  insisted,  this  was  a  war  condition,  not 
an  industrial  condition. 


'  Cf.  La  Balaille,  "  Les  Ouvriers  dans  la  guerre." 

2(X) 


CHAPTER  XIII 

THE  CO-OPERATIVE  MOVEMENT  IN 
GREAT  BRITAIN 

§  1.     Its  Significance 

The  co-operative  societies  inGreat  Britain  are  significant 
for  two  reasons.  In  the  first  place  they  embrace  a  large 
number  of  the  wage-earners  in  their  membership  and  sell 
to  them  a  quantity  of  goods  so  great  as  to  make  the 
co-operative  societies  the  largest  single  distributers  in  the 
country.  Secondly,  the  relations  of  this  large  movement 
to  the  trade  union  movement  have  recently  undergone 
a  change  tending  to  place  the  financial  resources  of  the 
former  at  the  disposal  of  the  latter  and  to  secure  for 
the  co-operative  movement  greater  support  among  the 
members  of  the  working  class.  Because  of  its  past  record 
and  achievements  and  because  of  its  possible  future 
influence,  the  co-operative  movement  is,  next  to  trade 
unionism,  the  most  significant  factor  in  the  economy  of  the 
workers  of  Great  Britain. 


§  2.     Types  of  Co-operation 

The  co-operative  movement  consists  of  two  types  of 
societies,  one  devoted  to  production,  the  other  to  distribu- 
tion. Although  productive  societies  furnish  a  vital 
exemplification  of  the  principle  of  co-operation,  they  are 
generally  considered  separately  from  the  co-operative 
movement  as  an  industrial  factor.  Much  of  this  pro- 
ductive co-operation  is  in  agriculture,  and  is  strongly 
developed  in  Ireland. 

The  organizations  are  of  two  types:  (1)  retail  societies 
whose  function  is  that  of  distribution,  (2)  wholesale 
societies  that  purchase,  sometimes  produce,  the  articles 
that  the  retail  societies  need.  The  wholesale  societies  in 
reality  are  national  federations  of  the  retail  societies,  there 
being  one  for  England  and  another  for  Scotland. 

201 


§  3.     History  and  Progress 

In  the  history  of  the  movement,  as  in  its  organization, 
the  retail  societies  form  the  basis  and  unit.  They  date 
from  the  famous  Rochdale  Pioneers,  who  established  in 
1844  the  society  that  was  to  prove  the  model  of  the  modern 
type  of  co-operative  distribution.  The  movement  spread 
rapidly  among  the  working  classes,  but  did  not  attain  any 
considerable  financial  importance.  At  the  end  of  twenty 
years  its  total  yearly  trade  was  under  £3,000,000.  But 
from  1864  onwards  the  Wholesale  Societies  became  organ- 
ized, and  the  movement  grew  more  vigorous.  By  1884  the 
total  yearly  trade  was  £30,000,000.  In  1914^  this  figure 
had  become  £147,550,000,  to  which  the  English  Co-opera- 
tive Wholesale  Society  contributed  nearly  £35,000,000,  the 
Scottish  Co-operative  Wholesale  Society  over  £9,000,000, 
the  greater  part  of  the  remainder  coming  from  the  trade  of 
the  retail  societies,  which  numbered  1,390.  The  member- 
ship of  the  movement  in  that  year  was  over  3,200,000 
persons,  representing  with  their  families  a  considerable 
proportion  of  the  working  population.  It  should  be  noted 
that  the  societies  are  strongest  in  the  Midlands  and 
northern  England,  in  the  large  industrial  centers. 


§  4.     Principles  behind  Co-operative  Movement 

The  co-operative  movement  is  based  on  certain  prin- 
ciples which  lead  its  supporters  to  argue  that  it  will  play  a 
large  part  in  the  social  economy  of  the  future.  It  is  marked 
by  the  fact  that  the  necessary  factor  of  capital  is  supplied 
by  its  own  members.  When  a  retail  society  is  founded, 
the  members  must  take  up  at  least  one  share  of  £1  paid, 
if  desired,  by  small  instalments,  or  held  back  from  the 
dividends.  On  all  shares  taken  up  a  certain  specified 
interest  rate  is  paid.  Further,  the  society  makes  a  profit 
on  its  transactions  and  after  paying  interest  and  setting 
aside  certain  reserves,  distributes  this  as  a  dividend 
among  its  members. 

In  reality,  however,  the  position  of  the  shareholder  is 
greatly  different  from  that  of  one  in  a  joint  stock  com- 
pany. His  holdings  are  limited  in  quantity,  and  the 
degree  of  his  control  over  the  society  bears  no  relation  to 
his  capital  invested.     His  profits,  too,  unlike  those  in  a 

'For  statistics  sec  Labour  Ycarliook,  1910,  p.  o92. 

202 


joint  stock  company,  are  increased  by  the  strength  and 
growth  in  numbers  of  the  co-operative  society  of  which  he 
is  a  member. 

This  is  because  the  profits  distributed  are  not  profits,  in 
the  ordinary  sense  of  the  word.  The  co-operative  societies 
do  not  seek  to  make  gain.  They  sell  to  themselves;  hence 
will  buy  or  produce  only  that  for  which  a  demand  is 
fairly  clearly  demonstrated.  Their  aim  also  is  to  sell  at 
cost  price  which  covers  all  the  expenses  of  production  and 
distribution.  But  calculation  to  a  nicety  of  the  actual 
cost  of  distribution  of  so  many  goods  is  impossible.  It  is 
also  more  politic  to  sell  at  prices  which  are  somewhat  near 
those  in  vogue  in  other  retail  stores.  Hence,  the  co- 
operative societies,  as  a  matter  of  practical  expediency, 
sell  goods  at  prices  which  permit  non-co-operative  busi- 
nesses to  make  a  profit.  At  the  close  of  each  year  a 
balance  is  struck,  and  a  "profit"  declared  and  distributed 
as  a  dividend.  In  reality,  this  profit  is  only  the  excess 
charges  over  the  cost  of  distribution,  and  its  return  to  the 
consumer  signifies  the  canceling  of  the  profit. 

The  dividend  paid  is  based  on  purchases  made  by  the 
consumer.  This  fact  has  an  important  reaction  upon  both 
the  society  and  the  dividends  themselves.  If  the  dividend 
is  really  the  excess  charges  over  the  cost  of  distribution 
then  an  increase  of  dividend  will  come  from  whatever  will 
diminish  the  cost  of  distribution.  An  increase  of  member- 
ship giving  increased  turnover,  and  relatively  decreased 
costs,  is  obviously  one  of  the  most  effective  economic 
means  towards  that  result.  The  fact,  therefore,  that  an 
increase  in  the  rate  of  dividend  is  to  be  looked  for  rather 
from  an  increase  in  membership  than  from  other  factors 
has  stimulated  the  growth  in  numbers  that  has  char- 
acterized the  history  of  the  movement. 

The  dividend  paid  to  the  consumer  has  a  threefold 
influence.  In  the  first  place  it  is  a  savings  bank  to  the 
member,  who,  in  many  cases,  is  the  housewife.  The 
dividend  is  often  spent  again  in  the  stores,  or  is  allowed  to 
accumulate  up  to  the  limit  of  capital  stock  permitted  to 
each  member,  and  then  withdrawn  for  the  purchase  of  a 
house  or  some  such  purpose.  In  this  sense  the  co- 
operative movement  makes  thrift  possible.  Secondly, 
the  basing  of  the  dividend  upon  purchases  is  an  induce- 
ment both  to  further  purchases  and,  as  explained  above, 
to  increased  membership.     The  movement,  therefore,  is 

203 


under  no  need  to  advertise,  and  saves  much  on  that 
score.  Thirdly,  the  custom  of  leaving  the  dividends  to 
accumulate  gives  financial  stability,  not  merely  to  the 
retail  societies  but  to  the  whole  movement.  This  custom 
has  threatened  at  times  to  prove  a  trouble  to  the  directors, 
who  have  reduced  the  rates  of  interest  but  without  any 
appreciable  effect  on  the  capital  deposited  with  them. 
The  presence  in  the  movement  of  these  reserves  of  capital 
forms  the  temptation  to  the  co-operation  with  trade  unions 
that  has  arisen  recently.  If  these  savings  are  loaned  to 
the  trade  unions,  the  operation  is,  of  course,  not  a  sound 
business  transaction. 

The  ultimate  control  of  the  movement  is  vested  in  the 
individual  member  of  the  retail  society.  Every  member 
has  but  one  vote,  and  must  attend  the  annual  meeting  to 
exercise  it.  The  immediate  control  is  in  the  hands  of  a 
management  committee,  from  eleven  to  fourteen  in  num- 
ber, elected  from  the  members  at  the  general  meeting. 
No  salary  is  paid  to  the  members  of  this  committee,  but  a 
remuneration  is  voted  them  from  time  to  time  at  the 
general  meeting.  They  control  the  salaried  and  wage- 
earning  staff,  being  directly  responsible  for  their  engage- 
ment and  conduct.  The  Co-operative  Wholesale  Societies 
are  federations  of  societies  and  both  are  governed  by 
directors  popularly  elected  from  the  representatives  of 
the  societies. 

This  form  of  democratic  government  and  control  is  open 
to  the  tendency  for  members  to  interfere  with  unimportant 
details  of  management.  In  effect,  this  form  of  criticism  at 
annual  meetings  is  said  to  have  proved  wholesome  rather 
than  deleterious.  In  fact,  also,  the  success  of  the  move- 
ment has  given  the  managing  committees  considerable 
prestige,  while  the  directors  of  the  wholesale  societies 
hold  what  is  practically  a  permanent  position.  It  should 
be  added  that  they  are  paid  a  salary  of  £400  a  year. 

The  war  is  held  to  mark  a  new  turning  point  in  the 
history  of  the  co-operative  movement  in  Great  Britain. 
Its  effects  on  the  movement  have  been  various.  It  has 
strengthened  confidence  in  co-operation  as  a  method  by 
which  goods  can  be  retailed  at  the  lowest  possible  price. 
At  the  commencement  of  the  war,  when  prices  began  to 
soar,  the  co-operative  societies  exerted  their  full  strength 
to  hold  them  down.  They  urgently  advised  their  members 
to  prefer  low  prices  to  high  dividends,  and  to  a  large 
extent   they   were    successful.      Their    action    led    to   an 

204 


increase  in  their  membership  of  a  little  over  20  per  cent 
and  strengthened  the  feeling  against  an  illegitimate  rise 
of  prices.  The  following  extract^  illustrates  a  way  in  which 
governmental  interference  became  a  matter  of  complaint: 

The  Government  became  the  sole  importer  of  wheat.  The 
Scottish  C.  W.  S.  (in  conjunction  with  the  English  C.  W.  S.) 
had  a  great  network  of  organizations  for  the  collecting  of 
wheat  all  over  Canada:  it  had  its  grain  elevators  studded 
along  the  great  arteries  and  on  the  shores  of  the  Great  Lakes; 
and  it  had  its  own  depot  at  Winnipeg.  .  .  .  Eventually,  the 
co-operators  were  forbidden  the  benefits  of  their  own  foresight 
and  thrift.  They  were,  first  of  all,  balked  by  shippers  on  the 
other  side;  and  then,  when  they  complained,  the  Wheat  Com- 
mission decided  that  the  Scottish  C.  W.  S.  wheat  must  be  sold 
to  the  government  agent  in  Canada.  The  wheat  collected 
had,  therefore,  to  be  sold.  The  agent  obtained  his  commission 
on  the  transaction.  The  Wholesale  had  to  purchase  its  wheat 
from  the  Government's  agent  on  this  side;  he,  too,  had  to 
receive  his  commission;  and  the  Wholesale,  instead  of  obtain- 
ing always  the  first  qualities  of  grain,  had  to  take  what  it  could 
get. 

Eventually,  in  view  of  the  rising  market  and  measures  of 
government  control,  it  was  found  impossible  for  the  co- 
operative societies  to  hold  general  prices  down.  They 
began  to  sell,  in  accordance  with  their  usual  policy,  at  or 
near  the  prevailing  market  rate.  Consequently,  large 
surpluses  began  to  appear  on  their  balance  sheets,  and  an 
agitation  was  commenced  aiming  to  bring  them  under  the 
income  tax  and  excess  profits  duties.  Hitherto,  on  the 
ground  that  they  did  not  make  profits,  they  had  been 
excused  from  income  tax.  To  the  anger  and  amazement  of 
the  members,  the  excess  profits  tax  was  applied  to  their 
dividends. 

Because  of  the  increase  in  the  basic  cost  of  the  materials 
distributed  and  in  order  to  utilize  the  balances  now 
subject  to  the  excess  profits  tax,  the  movement  launched 
forth  into  a  whole  series  of  productive  enterprises.  Ten 
thousand  acres  of  wheat-growing  land  were  bought  in 
1917,  while  estate  after  estate  in  England  was  purchased 
till  the  total  land  held  there  amounted  to  over  32,649 
acres.  Extensions  took  place  in  existing  factories  and 
many  new  ones  were  set  up.  A  Northumbrian  coal  mine 
was  acquired  in  1917  at  a  cost  of  £50,000.     The  total 

^"The  People's  Yearbook  and  Annual  of  the  English  and  Scottish  Wholesale 
Societies,"  1919,  p.  77. 

205 


expended  by  the  English  Co-operative  Wholesale  Society 
on  land,  factories,  and  buildings  from  the  beginning  of  the 
war  till  the  end  of  1918  had  reached  over  £1,500,000. 

§  5.     Entrance  upon  Politics 

But  the  most  significant  and  epoch-making  reaction 
of  the  co-operative  societies  to  war  conditions  has  come 
in  their  determination  to  enter  the  political  arena.  The 
events  described  above  were  the  main  causes  of  this 
decision.  As  the  Labour  Party  felt  themselves  driven  into 
political  action  by  the  Taff  Vale  decision,  so  the  co- 
operators  were  spurred  to  use  their  powers  and  numbers 
politically  by  the  application  to  their  balances  of  the 
excess  profits  tax.  A  special  congress  in  October,  1917, 
drew  up  a  scheme  for  securing  direct  representation  for 
co-operators  in  Parliament  and  on  local  administrative 
bodies.  The  platform  of  the  party^  calls  for  the  organiza- 
tion of  the  processes  of  production,  distribution,  and  ex- 
change on  co-operative  lines  in  the  interests  of  the  whole 
community,  for  the  elimination  of  profiteering  by  legisla- 
tive or  administrative  action,  for  taxation  of  land  values, 
the  establishment  of  a  national  credit  bank,  adequate 
housing,  and  a  more  democratic  system  of  education. 
Their  manifesto^  issued  before  the  general  election  in 
December,  1918,  at  which  ten  co-operators  stood  as  candi- 
dates, declared  that  co-operation  had 

protected  the  consumer  from  having  to  submit  to  the  prices 
fixed  by  syndicates  and  other  concerns  out  of  proportion  to 
the  actual  value  and  cost  of  daily  necessities. 

Further,  it  had 

demonstrated  that  one  of  the  best  means  of  abolishing  many 
of  the  social  evils  at  present  existing  is  by  the  elimination  of 
the  competitive  industrial  system,  which  enriches  the  few  at 
the  expense  of  the  many,  and  [by]  the  substitution  of  mutual 
co-operation  for  the  common  good  as  the  basis  of  all  human 
society. 

To  many  among  the  movement,  co-operation  is  a  social 
philosophy  on  which  can  be  erected  a  new  social  order.^ 

1  "  People's  Yearbook,"  1919,  pp.  377-79. 

« Ibid.,  p.  379. 

'  For  treatment  of  the  subject  from  this  point  of  view,  see  Woolf,  Leonard  S.: 
"Co-operation  and  the  Future  of  Industry."  George  Allen  &  Unwin.  Ruskin 
House,  1918. 

200 


§  6.  Relations  to  the  Labor  Movement 
The  significance  of  this  entrance  upon  political  activity 
lies  in  the  relations  between  the  co-operative  and  the  labor 
movements.  By  reason  of  the  character  of  its  member- 
ship, the  co-operative  movement  in  politics  will  be  a 
branch  of  the  labor  organization. 

The  co-operator  and  trade  unionist  find  that  their  political 
(in  the  broad  sense)  and  social  ideals  are  the  same,  and  that 
in  particular  cases  they  are  almost  always  pursuing  the  same 
political  and  social  objects.^ 

The  Labour  Party  had  always  been  the  solitary  champion 
of  co-operative  interests  in  the  House  of  Commons,  while 
the  two  movements  claim  to  be  interested  in  common 
in  the  improvement  of  education  and  the  betterment  of 
social  conditions. 

The  co-operative  movement  had  begun  before  the  war 
to  show  both  the  nature  and  extent  of  its  sympathy  with 
trade  unionism.  In  the  coal  strike  of  1912,  the  Northum- 
berland unions  at  length  reached  the  limit  of  their  funds 
and  wished  to  borrow  money.  The  English  Co-operative 
Wholesale  Society's  bank  came  to  their  relief  and  advanced 
£70,000.  The  retail  societies  in  the  district  allowed 
members  to  withdraw  all  their  accumulated  capital, 
declared  an  interim  dividend,  and  temporarily  reduced 
prices  to  "bed-rock."  This  action  on  the  part  of  the 
retail  societies  was  in  turn  made  possible  by  the  guarantee 
of  the  banking  department  of  the  C.  W.  S.  Further,  in 
the  Dublin  strike  of  1913,  the  C.  W.  S.  accepted  an  order 
from  the  unions  for  the  dispatch  of  shiploads  of  food  to 
the  strikers  and  their  families. 

In  view,  therefore,  of  the  determination  of  the  co- 
operators  to  adopt  political  action,  and  the  perception 
by  the  trade  unions  that  they  could  find  financial  support 
from  the  co-operative  movement,  a  rapprochement  was 
effected  in  October,  1917.  A  United  Advisory  Council 
of  Trade  Unionists  and  Co-operators  was  set  up.  In  a 
general  statement  of  the  objects  to  be  furthered  and 
attained  by  this  council,  it  was  declared  incumbent  on 
trade  unionists  to  become  members  of  their  local  co- 
operative societies,  and  employees  of  co-operative  societies 
to  join  their  trade  unions.  The  three  most  significant 
objects  of  this  entente  cordiale  follow:^ 

1  Woolf,  Leonard  S.:  "Co-operation  and  the  Future  of  Industry,"  p.  69. 
Cf.  pp.  69-74. 

2  Ibid.,  pp.  93-4. 

207 


The  consideration  of  how  far  it  is  practically  possible  for  the 
surplus  capital  of  the  respective  movements  to  be  utilized  for 
the  promotion  and  development  of  co-operative  enterprise, 
and  making  of  recommendations  thereon. 

The  examination  of  the  facilities  for  banking  and  insurance 
now  offered  by  the  co-operative  movement,  to  see  where  these 
can  be  extended  and  improved  or  made  more  adaptable  to 
working-class  requirements,  especially  with  regard  to  the  pro- 
vision of  facilities  through  the  various  co-operative  stores  in 
the  country,  so  that  cheques  presented  by  trade  unions  can 
be  honored  in  such  manner  as  will  best  meet  the  convenience 
of  the  trade  unions  and  the  co-operative  societies. 

The  consideration  of  how  far  it  is  desirable  and  possible  to 
insure  the  unrestricted  distribution  of  food  supplies,  or  the 
payment  of  benefit  during  important  trade  disputes  by 
issuing  through  the  various  branches  of  the  Co-operative 
Movement  food  coupons  or  loans  from  the  Co-operative 
Wholesale  Society's  bank  on  the  security  of  trade-union  assets. 

In  essence  this  is  an  offensive  and  defensive  alliance 
whereby  the  trade  unions  give  their  support  to  co- 
operative enterprise,  and  the  co-operators  become  the 
bankers  and  distributers  of  food  for  trade  unions  during 
times  of  strike.  Whatever  one  may  think  of  the  business 
transaction,  it  means  that  the  trade  unions  have  strength- 
ened themselves  at  their  two  weakest  points,  finance  and 
food.  The  English  Co-operative  Wholesale  Society's 
bank  has  an  annual  turnover  of  nearly  £200,000,000, 
while  the  capital  and  reserves  of  the  whole  movement 
in  England  and  Scotland  reach  £65,000,000.  While  the 
funds  of  the  unions  are  by  no  means  inconsiderable,  the 
addition  of  those  of  the  co-operative  movement  will 
strengthen  them  greatly.  While  it  by  no  means  follows 
that  a  solid  working  alliance  between  co-operators  and 
trade  unionists  has  been  evolved,  there  is  an  obvious 
tendency  for  the  movement  to  link  itself  with  Labour 
politics.  There  is,  however,  a  great  deal  of  conservatism 
among  the  members  who  are,  in  general,  among  the 
higher  paid  of  the  skilled  workers,  and  it  is  generally  felt 
that  effective  political  action  by  the  co-operative  move- 
ment will  require  "an  immense  and  persistent  educational 
and  political  campaign."  Such  a  campaign  has  not  yet 
been  instituted  and  the  whole  spirit  of  the  movement 
is  against  its  institution.  It  is  probable  that  political 
representation  will  fall  into  the  background,  but  that  the 

2U8 


two  movements  will  follow  a  parallel  course  on  social 
questions,  each  complementing  the  other  in  a  silent, 
practical  fashion. 

§  7.     Relation  of  British  and  Russian  Co-operative 

Societies^ 

International  co-operation  between  the  Russian  and 
British  co-operative  movements  dates  from  1916.  In 
that  year,  the  Moscow  Narodny  Bank,  created  in  1912 
by  Russian  co-operative  societies  and  controlled  by  them, 
and  which  on  account  of  its  banking  transactions  with 
Russian  co-operative  organizations  was  in  a  sense  repre- 
sentative of  them,  opened  a  branch  office  in  London. 
Before  this,  the  Union  of  Siberian  Creamery  Associations, 
desirous  of  placing  its  butter  and  other  dairy  products 
on  the  British  market  and  of  purchasing  British  manu- 
factured goods  for  its  retail  stores,  had  established  an 
office  in  London.  The  Moscow  Narodny  Bank  in  1917 
did  a  business  of  6,000,000,000  roubles,  equivalent  at 
normal  rate  of  exchange  to  $3,000,000,000.  The  Union 
of  Siberian  Creamery  Associations  in  the  same  year  sold 
goods  valued  at  160,367,000  roubles  (about  $80,183,500); 
its  membership  consisted  of  2,038  co-operative  creameries, 
besides  1,859  distributive  co-operative  societies.  Two 
powerful  Russian  co-operative  organizations  were  thus 
existing  in  London,  while  other  Russian  co-operative 
societies  were  contemplating  the  establishment  of  branch 
offices. 

Nothing  might  have  come  of  this  had  not  the  war 
created  a  situation  which  both  British  and  Russian  co- 
operative societies  had  to  meet.  The  British  needed 
raw  materials;  Russia  needed  manufactured  articles. 
Russia  had  butter,  eggs,  wheat,  flax,  timber,  sugar,  and 
hides  in  abundance,  but  required  clothing,  shoes,  tools, 
domestic  utensils,  seeds,  and  chemical  manures.  These 
articles  the  mills  and  factories  of  the  Co-operative  Whole- 
sale Society,  Ltd.,  and  the  agricultural  departments  of 
the  Scottish  Co-operative  Wholesale  Society,  Ltd.,  and 
the  Irish  Agricultural  Wholesale  Society,  Ltd.,  could 
supply.  Moreover,  the  war  had  created  in  Great  Britain 
an  interest  in  all  things  Russian  and  this   interest  was 

1  Cf .  Rockel,  Frederick  A.:  "An  Experiment  in  International  Co-operation." 
Pamphlet  published  by  Russo-British  Co-operative  Information  Bureau,  1919. 
Also,  Russian  Co-operator. 

209 


reciprocated  In  Russia.  Both  countries  were  united  as 
allies;  each  was  in  need  of  materials  which  in  large  meas- 
ure could  be  supplied  by  the  other. 

As  a  result,  early  in  1917,  a  joint  committee  of  English, 
Scottish,  and  Irish  Wholesale  Societies  was  appointed  to 
confer  with  representatives  of  the  Moscow  Narodny  Bank 
and  the  Union  of  Siberian  Creamery  Associations  with  a 
view  to  agreement  upon  some  plan  that  would  make 
effective  this  mutual  desire  to  promote  trading  between 
the  co-operative  societies  themselves. 

These  deliberations  led  to  a  decision  to  set  up  a  com- 
mittee of  representatives  of  such  of  the  Russian  societies 
as  had  branch  offices  in  Great  Britain  and  of  representa- 
tives of  the  English,  Scottish,  and  Irish  societies.  The 
name  of  the  newly  created  body  was  the  Russo-British 
Co-operative  Information  Bureau.  As  first  constituted, 
this  comprised  representatives  only  of  the  Moscow 
Narodny  Bank,  the  Union  of  Siberian  Creamery  Associa- 
tions, the  Co-operative  Wholesale  Society,  Ltd.,  the 
Scottish  Co-operative  Society,  Ltd.,  and  the  Irish  Agri- 
cultural Wholesale  Society,  Ltd.  With  the  arrival  of 
representatives  of  other  Russian  co-operative  organiza- 
tions empowered  to  establish  offices  in  London,  the 
number  of  Russian  societies  included  was  increased. 
The  Moscow  Union  of  Consumers'  Societies  (which  has 
since  become  the  AU-Russian  Central  Union  of  Con- 
sumers' Societies  —  known  in  short  as  ^^Ceiitrosyus^^), 
the  Union  of  Siberian  Co-operative  Unions — known  as 
^^Zakupsbyf^  (meaning  "purchase-sell"),  and  the  Central 
Association  (or  All-Russian  Co-operative  Union)  of  Flax 
Growers,  were  added  in  the  order  named. 

What  the  addition  of  these  societies  meant  may  be 
indicated  by  their  constituent  membership  and  amount 
of  business  turnover.  The  All-Russian  Central  Union 
of  Consumers'  Societies  (Centrosyus)  is  composed  of  20 
co-operative  societies  of  over  10,000  members  each,  and 
307  unions  of  co-operative  societies  with  a  membership 
on  January  1,  191S,  of  10,241,047  persons;  its  business 
for  the  year  1918  aggregated  1,000,000,000  roubles 
(about  $500,000,000).  The  Union  of  Siberian  Co-opera- 
tive Unions  (Zakupshyt)  represents  29  co-operative 
unions  to  which  arc  affiliated  9,520  consumers'  societies, 
creamery  and  fishery  associations,  and  other  organiza- 
tions in   the  Urals,  Siberia,  and  the  Far  East;  its  service 

210 


extends  to  2,696,529  members,  who  with  their  families 
number  about  10,000,000  souls;  its  turnover  between 
January  1  and  November  1,  1918,  amounted  to  98,623,446 
roubles  (about  $49,311,723).  The  Central  Association 
of  Flax  Growers  comprises  about  3,500  societies  of  flax 
growers  with  a  membership  of  3,500,000;  in  the  agricul- 
tural year  1917-1918  it  collected  over  2,000,000  poods 
(about  36,000  tons)  of  flax,  1,000,000  poods  of  which  were 
sold  to  the  British  market. 

The  addition  of  these  members  gave  greater  strength 
to  the  Russo-British  Co-operative  Information  Bureau. 
Difficulties  were,  however,  encountered  from  the  first. 
Great  quantities  of  butter  from  Siberia  were  exported 
in  the  early  part  of  the  war,  but,  in  1916,  an  embargo 
on  this  trade  was  laid  by  Russian  authorities  in  order  to 
meet  the  increasing  demands  of  the  army  at  home. 
Wheat,  too,  had  been  exported  in  large  quantities;  the 
bulk  of  this  was  raised  in  South  Russia  and  sent  to 
England  from  the  ports  on  the  Black  Sea.  The  entry  of 
Turkey  into  the  war  closed  the  Dardanelles  and  shut  off 
the  Black  Sea  ports  from  commerce  with  Europe.  The 
Baltic  Sea  was  equally  inaccessible  owing  to  the  presence 
of  a  German  fleet  at  the  northern  end  of  the  Kiel  Canal. 
Archangel  was  free  from  enemy  interference,  but  the 
port  is  ice-bound  a  great  part  of  the  year.  Vladivostok, 
although  open  to  trade,  was  congested,  and  the  breakdown 
of  the  Trans-Siberian  Railway  left  the  docks  and  store- 
houses filled  with  goods  and  made  storage  and  trans- 
portation difficult. 

The  Russo-British  Co-operative  Information  Bureau 
has,  therefore,  been  giving  its  time  to  preparatory  work. 
To  acquaint  the  constituent  societies  of  the  resources 
and  services  available  to  the  co-operatives  of  each  country, 
many  reports  have  been  prepared  and  circulated.  Numer- 
ous conferences  have  been  held  and  interviews  with 
government  officials  exchanged.  In  addition,  consider- 
able efforts  have  been  made  in  behalf  of  the  extension 
of  the  co-operative  movement,  for  the  elimination  of  the 
middle-man  and  against  centralization  of  trading  activity 
in  private  monopolies.  A  business  deputation  is  to  be 
sent  to  Russia  as  soon  as  conditions  warrant.  The 
Russiafi  Co-operator,  a  journal  devoted  to  the  interests 
of  the  constituent  societies,  is  being  published. 


211 


CHAPTER  XIV 
NOTABLE  EXAMPLES  OF  WELFARE  WORK 

§  1.     Three  Prominent  Instances  in  Great  Britain 

Among  British  firms  that  have  achieved  success  in 
deahng  with  their  employees  three  stand  out  pre-emi- 
nently. These  three  are  not  merely  successful  and  well 
established  in  their  respective  industries,  but  their 
schemes  are  comprehensive  and  well  known.  The  three 
referred  to  are  those  of  Rowntree  &  Company,  Ltd., 
York;  Cadbury  Brothers,  Bournville,  and  Lever  Brothers, 
Port  Sunlight.  The  two  former  are  manufacturers  of 
cocoa  and  chocolate  products;  the  latter  is  the  famous 
soap  manufacturing  firm,  of  which  Lord  Leverhulme  is 
the  managing  director.  The  two  former  agree  in  having 
a  large  percentage  of  women  and  girls  in  their  employ, 
and  in  being  under  the  control  of  the  Trade  Boards  in 
regard  to  wages.  The  latter  firm  in  normal  times  em- 
ployed only  25  per  cent  women,  although  at  the  time  of 
investigation  (April,  1919)  the  percentage  was  50. 

All  three  firms  concurred  in  their  conception  of  care 
for  their  employees  as  being  "good  business."  This 
view  was  founded  on  the  breadth  of  the  betterment 
systems  in  vogue  in  each  establishment.  What  welfare 
means  to  these  employers  is  thus  set  forth  by  Lord  Lever- 
hulme in  an  address  to  the  students  of  Sheffield  University, 
September  24,  1918: 

"I  know  that  there  is  a  preconceived  false  idea  in  many 
minds  that  welfare  work  in  factories  is  largely  a  question  of 
canteens,  model  villages,  free  libraries,  and  so  on;  but,  in  my 
opinion,  welfare  work  in  factories  is  much  more  a  question 
of  wages  and  hours,  of  ventilation  in  the  factory,  of  cubical 
air  space,  and  of  heating  and  lighting  and  sanitation.  Every 
fact,  circumstance,  and  condition  of  employment  affecting  the 
workers  en<,'aged  in  a  factory  or  office  —  mentally,  physically, 
or  materially  —  must  come  within  its  scope."  ^ 

Consequent  upon  this  conccj^tioii,  one  finds  not  only 
that  canteens  are  provided,  but  that  large,  airy,  and  taste- 

'  Lord  Leverhulme:  " 'J'he  Six-lloiir  Day  and  Other  iiidustiial  Questions," 
p.  183.     Allen  &  Unwin,  1918. 

212 


fully  designed  dining  rooms  have  been  erected  for  em- 
ployees. Health  is  not  considered  merely  a  condition 
to  regular  and  efficient  attendance,  it  is  the  personal 
concern  of  one  or  more  of  the  administrative  staff,  who 
arrange  for  medical  attendance,  dental  attendance,  holi- 
days, or  a  visit  to  a  convalescent  home.  Hours  of  labor 
are  not  regarded  as  a  mere  economic  factor,  of  concern 
chiefly  to  the  employer;  they  are  reduced  on  the  em- 
ployer's initiative  to  the  lowest  practicable  scale,  and 
allocated  throughout  the  week  according  to  the  collective 
wish  of  the  employees.  Wages  are  not  merely  a  factor 
in  production  cost,  to  be  kept  down  to  the  lowest  limit; 
they  are  the  rewards  of  workers,  who  must  receive  the 
highest  wage  that  it  is  possible  to  pay  them,  and  must 
thereby  be  attached  to  the  establishment  in  which  they 
have  worked.  In  short,  industrial  betterment  as  con- 
ceived in  these  three  establishments,  is  the  voluntary 
and  organized  effort  of  socially  minded  and  highly  suc- 
cessful business  firms  to  render  more  agreeable  every 
condition  of  employment.  It  is  based  on  the  principle 
that  "no  business  can  be  run  successfully  which  was 
not  regardful  of  the  interests  of  the  men  and  women 
employed  therein."^  It  has  succeeded  largely  because 
there  has  been  in  it  much  of  the  spirit  of  co-operation 
without  which  no  machinery  and  no  organized  effort  can 
achieve   success. 

§  2.     Scope  of  Care  for  Employees 

The    care    given    to    employees    covers    the    following 
subjects: 

1.  Health,  including  medical  and  dental  care,  safety  devices, 
canteens,  and  provisions  for  meals. 

2.  Recreation,  comprising  physical  instruction,  provision  of 
sports  grounds  and  swimming  pools,  clubs,  libraries,  and  so 
on. 

3.  Education,  particularly  of  young  people  between  fourteen 
and  seventeen  years  of  age.  There  are  also  plans  for  adult 
education  and  for  that  of  deputy  forev/omen. 

4.  Working  conditions,  including  the  questions  of  hiring  and 
firing,  the  cleanliness  and  neatness  of  the  buildings,  and 
the  possibility  of  the  employees'  suggesting  improvements. 

5.  Pensions  and  savings  as  provision  for  yearly  or  seasonal 
holidays  and  for  old  age. 

^  Lord  Leverhulme,  in  an  interview,  London,  April  28,  1919. 

213 


6.  Wages  and  profit  sharing,  or  the  use  of  the  wage  relation 
so  as  to  produce  a  spirit  of  satisfaction  throughout  the 
estabUshment  which  will  find  itself  reflected  in  efficient 
service. 

7.  Hours  of  labor,  including  the  length  of  the  workday  or  of 
the  work  week,  and  the  distribution  of  the  week's  work. 

8.  Housing  schemes,  as  measures  for  making  the  home  life  of 
the  worker  more  agreeable  and  thus  promoting  his  effi- 
ciency. 

While  all  of  these  are  interesting,  attention  will  be 
given  in  this  report  only  to  those  more  intimately  related 
to  working  conditions  and  labor  relations. 


§  3.     Education    and    Employment    of    Younger 

Persons 

All  three  establishments  covered  by  this  investigation 
give  attention  to  education.  They  required  all  persons 
under  eighteen  years  of  age,  accepted  for  employment, 
to  agree  to  attend  educational  classes  until  they  attained 
the  age  of  eighteen  years.  The  restrictions  imposed  by  the 
war  upon  educational  finances,  and  the  insertion  in  the 
Education  Act  (1918)  of  provision  for  similar  continua- 
tion classes,  have  altered  the  situation  so  that  their  edu- 
cational schemes  are  now  almost  a  matter  of  history. 
They  occupied  a  definite  place,  however,  in  the  scheme 
of  care  for  employees  as  measures  to  fit  the  worker  for 
his  task  and  offer  him  opportunities  for  advancement. 

The  curriculum  at  Rowntree's  comprised  gymnastics, 
mathematics,  English,  and  woodwork  for  boys,  and  gym- 
nastics, needlework,  cookery,  and  housewifery  for  girls. 
The  last  subject  forms  the  main  item  in  the  third  year 
of  the  course,  and  is  practically  demonstrated  in  two 
cottages  built  for  the  purpose.  At  Cadbury's,  the  course 
for  boys  during  the  first  two  years  included  English, 
arithmetic,  history,  geography,  science,  and  art.  After 
that  period  the  curriculum  becomes  more  specialized, 
taking  a  commercial  direction  for  boys  engaged  in  the 
office,  and  technical  for  those  on  the  industrial  side. 
For  girls  the  training  is  domestic,  and  includes  physiology, 
industrial  history,  dressmaking,  home  nursing,  cookery, 
and  laundry  work,  terminating,  as  at  Rowntree's,  with  a 
year's  course  at  a  typical  cottage  in  the  village.  At 
Lever  Brothers,  the  course  for  boys  is  somewhat  similar 

214 


to  that  just  described.  A  pre-vocational  stage,  covering 
the  years  fourteen  to  sixteen  was  devoted  to  a  general 
education,  giving  a  satisfactory  groundwork  of  knowledge 
adequate  for  the  development  of  some  special  interests  — 
a  knowledge  of  English,  commercial  geography,  elemen- 
tary mathematics,  and  arithmetic.  From  the  age  of  six- 
teen the  students  specialized  along  some  line  that  would 
"help  them  in  the  office  or  in  the  workshop,  and  give 
them  enjoyment  in  their  work." 

Their  educational  schemes  have,  except  at  Bournville, 
been  established  and  maintained  by  the  firm.  The 
teaching  staff  is  paid  by  the  firm,  and  all  buildings  and 
equipment  supplied.  Lever  Brothers  reward  students 
whose  educational  progress  is  marked,  by  granting  them 
advances  in  weekly  pay  proportioned  to  their  progress. 

At  Bournville,  where  the  founders  are  greatly  inter- 
ested in  the  Adult  School  Movement,  considerable  impetus 
is  given  to  continued  education.  It  is  noteworthy  that 
the  firm  early  in  1917  arranged  that  its  young  people, 
whose  school  attendance  was  limited  to  one  half-day  per 
week,  should  have  the  option  of  attending  twice  per  week, 
if  their  parents  desired  it.  This  opportunity  was  seized  by 
35  per  cent  of  the  boys  and  40  per  cent  of  the  girls,  though 
no  pay  was  given  directly,  only  bursaries  for  good  prog- 
ress, covering  one-third  of  the  total  number  of  students 
entered  being  offered.  The  second  half-day  is  devoted 
in  the  case  of  the  boys  to  science  and  metal  work,  and 
in  the  case  of  the  girls  to  art.  Many  students  ask  for  the 
continuation  of  their  classes  after  they  have  passed  the 
compulsory  age,  and  this  request  has  been  met.  There 
is  also  a  works  school,  where  a  number  of  special  classes 
are  held,  dealing  with  subjects  of  pertinent  interest  to 
the  firm,  such  as  box  making,  biscuit  making,  confec- 
tionery, and  office  routine.  Recently  there  has  been 
instituted  a  class  for  the  training  of  deputy  forewomen. 

§  4.     Working  Conditions 

The  questions  of  "hiring  and  firing"  are  held  by  these 
firms  to  be  measures  of  the  extent  to  which  men  and 
women  are  fitted  into  their  workshop  conditions  and 
made  comfortable  and  contented.  No  one  of  the  three 
establishments  gives  quite  such  prominence  to  this 
matter   as   does  the  firm  of   Rowntree.     Neither  of  the 

215 


other  two  firms  utilizes  an  employment  manager.  At 
Bournville  the  local  labor  exchange  sends  along  applicants 
from  whom  foremen  select  those  whom  they  prefer.  At 
Rowntree's  there  is  an  employment  manager  for  each 
of  the  sexes.  These  persons  select  applicants  for  em- 
ployment, follow  them  up  during  the  early  weeks  of  their 
engagement,  report  on  their  fitness  for  their  present 
position,  deal  with  all  necessary  readjustments,  report 
to  the  directors  on  the  qualifications  of  prospective  fore- 
men, and  handle  the  whole  question  of  dismissal  of  em- 
ployees. Their  action  in  keeping  in  touch  with  new 
employees  is  held  by  them  to  result  in  better  work  and  a 
more  contented  attitude  on  the  part  of  the  employees. 
By  having  charge  of  readjustments,  the  employment 
managers  are  able  to  stop  the  favoritism  which  foremen 
often  show,  to  the  detriment  alike  of  the  firm  and  the 
workers,  and  to  put  men  in  places  where  they  can  work 
best,  thereby  reducing  the  labor  turnover. 

In  the  matter  of  dismissals,  the  firm  acts  on  the  prin- 
ciple that  no  man  should  be  discharged  from  the  regular 
staff  except  on  account  of  bad  work  or  proved  unfitness, 
or  for  some  grave  offense.  In  every  case  full  investiga- 
tion is  made  by  a  departmental  head,  and  the  matter  is 
reported  to  the  employment  manager.  The  latter  then 
seeks  to  find  out  whether  the  employee  in  question 
might  not  prove  more  satisfactory  if  put  on  another  class 
of  work.  This  method  is  followed  where  the  employee 
has  given  notice.  Dismissal  cannot  take  place  ultimately 
except  with  the  sanction  of  one  of  the  directors.  Concrete 
illustration  of  the  firm's  method  was  given  at  the  period 
of  investigation.  A  large  number  of  temporary  men 
had  been  employed  during  the  war,  and  their  places  were 
wanted  for  men  who  had  returned  from  active  service. 
The  temporary  men  were  given  a  month's  notice  to  find 
a  new  place,  and  a  week's  wage  in  place  of  the  annual 
summer  holiday  at  the  end  of  July.  Should  any  of 
these  men  not  get  work  outside  the  establishment,  he 
was  offered  casual  work  cleaning  the  premises.  The 
firm  apparently  did  not  wish  even  a  temporary  worker 
to  suffer  unemployment. 

The  employment  department  is  also  required  to 
arrange  for  the  transfer  of  men  from  departments  which 
are  short  of  work  to  those  which  are  busy.  This  method, 
together  with  the  regulation  of  work  so  as  to  avoid  heavy 
overtime    at   one    period   of   the   year   and    slackness    at 

216 


another,  makes  it  quite  an  unusual  occurrence  in  Rown- 
tree's  establishment  to  dispense  with  employees  owing 
to  lack  of  work.  In  case  of  illness,  an  employee's  place 
is  kept  open  for  him  so  long  as  there  is  a  reasonable  chance 
of  his  recovery. 

The  interest  of  the  workers  in  their  conditions  is  stimu- 
lated in  a  variety  of  ways.  All  three  firms  give  facilities 
and  offer  prizes  for  suggestions  from  the  employees  con- 
cerning reduction  of  waste,  increase  of  output,  betterment 
of  transporting  material,  improvement  in  factory  organi- 
zation, or  greater  safety.  While  much  is  done  for  them 
under  welfare  schemes,  into  which  an  element  of  pater- 
nalism enters,  the  workers  retain  a  great  deal  of  interest 
and  pride  in  their  establishment  and  do  much  to  keep 
up  its  name  and  reputation. 

§  5.     Wages  and  Profit-Sharing 

"The  establishment  of  a  satisfactory  level  of  wages  is 
the  first  step  in  industrial  betterment."  Acting  on  this 
view,  Messrs.  Rowntree  &  Company  lay  stress  on  secur- 
ing as  high  a  wage  as  they  consistently  can  for  their 
employees.  A  similar  principle  obtains  in  the  works 
of  Cadbury  Brothers,  where  the  firm  pays  the  highest 
wages  possible,  in  accordance  with  Trade  Board  awards 
or  agreements  with  trade  unions.  The  minimum  fixed  by 
the  firm,  which  is  never  allowed  to  become  a  general 
maximum,  is  often  above  that  fixed  by  the  particular 
trade  union.  Rowntree  &  Company  establish  a  theo- 
retical minimum  which  also  is  considerably  above  that 
fixed  under  the  Trade  Boards  Act  and  also  above  the 
local  standard  rates.  Measures  are  then  taken  to  see 
that  no  worker  falls  below  that  minimum.  The  wages 
of  each  employee  are  calculated  every  week  on  a  basis 
of  full  time,  and  summarized  each  quarter.  They  are 
then  compared  with  the  firm's  theoretical  minimum. 
Where  the  wages  of  any  more  than  a  small  proportion 
of  employees  in  any  department  fall  below  this  minimum, 
inquiry  is  made  into  the  working  of  the  department,  and 
steps  taken  to  correct  the  reason.  The  earnings  of  piece- 
workers are  examined  every  week  by  the  same  standard, 
and,  where  they  fall  below  the  minimum,  an  endeavor 
is  made  to  put  the  matter  right  by  paying  a  little  special 
attention  to  the  worker,  or  by  transferring  him  or  her  to 
some   other   class   of  work.     The   firm,    in   one   of   their 

217 


printed  pamphlets,  expresses  the  following  judgment  upon 
their  action: 

"There  is  no  doubt  that  this  systematic  and  detailed 
inspection  of  wages  has  resulted  in  a  considerable  increase  in 
the  average  wage,  and  in  greater  satisfaction  amongst  the 
workers."^ 

Lord  Leverhulme,  in  his  various  establishments  at 
Port  Sunlight  and  elsewhere,  pays  the  trade  union  rate 
of  wages  or  the  current  rate  of  wages  in  trades  where 
there  is  no  union.  But,  as  an  employer,  he  is  conspicuous 
for  his  success  in  evolving  a  co-partnership  plan  which, 
after  many  changes,  has  taken  a  form  that  overcomes 
many  of  the  objections  to  profit-sharing  in  general. 
This  scheme  of  co-partnership  is  based  upon  full  wages 
to  management  and  labor,  and  a  reasonable  rate  of  interest 
to  capital.  Certificates  are  given  by  the  firm  to  employees 
in  proportion  to  wages  or  salary,  the  general  percentage 
to  wages  being  10  per  cent.  The  allotment,  however, 
is  proportioned  further  to  fidelity  and  thoroughness  of 
service,  so  that  the  slacker  receives  nothing,  the  apathetic 
from  5  to  10  per  cent,  and  the  enthusiastic  more  than  10 
per  cent.  Persons  who  share  as  copartners  must  be  at 
least  twenty-two  years  of  age,  and  must  have  served  the 
firm  at  least  four  years.  Employees  on  the  general  staff 
give  a  pledge  not  to  waste  time,  labor,  materials,  or 
money  In  the  discharge  of  duty,  but  loyally  and  faith- 
fully to  further  the  interests  of  the  company. 

The  partnership  certificates  have  no  commercial  value. 
They  do  not  represent  capital,  and  cannot  be  disposed  of. 
They  are  a  gift  from  the  firm,  comprising  a  claim  to  a 
proportion  of  the  profits  of  the  company.  The  dividends 
on  these  partnership  certificates  are  lower  by  a  margin 
of  5  per  cent  than  the  percentage  paid  on  the  ordinary 
shares.  They  are  paid  in  a  distinct  class  of  preferred 
ordinary  shares,  the  accumulation  of  which  gives  the 
employee  a  real  and  reasonably  considerable  interest 
in  the  firm. 

§  6.     Hours  of  Labor 

The  aim  of  all  llic  welfare  schemes  now  under  descrip- 
tion is  to  reduce  the  hours  of  labor  to  the  lowest  point 
consistent   with   economy   and   efficiency   of   production. 

'  Rovvntrcc  &  Co.,  "Iiiduslrial  Bcttcrriicnt  at  the  Cocoa  Works,  York,"  p.  14, 

218 


The  three  respective  employers  have  always  stood  out 
among  those  who  work  a  short  day.  Thus,  Rowntree's 
reduced  from  a  53-hour  week  to  a  48-hour  week  as  far 
back  as  1896,  while  Cadbury's,  surrounded  by  firms 
where  a  54-hour  week  was  general,  were  working  in  1912 
a  48-hour  week  for  men  and  a  42-hour  week  for  women. 
In  both  firms,  which  have  a  seasonal  trade,  overtime  is 
carefully  watched  by  the  directorate,  in  order  to  reduce 
it  to  the  lowest  limit. 

At  present  both  firms  have  recently  reduced  their 
hours,  by  common  agreement  within  the  trade,  to  a 
44-hour  week.  In  both  cases  the  week-end  rest  has  been 
extended.  At  Rowntree's  the  employees  were  requested 
to  vote  for  the  division  of  the  work  week  they  preferred. 
Out  of  three  alternatives  the  five-day  week,  by  which 
Saturday  morning  labor  was  dispensed  with,  was  endorsed 
by  a  large  majority.  At  Cadbury's  an  average  week  of 
44  hours  is  worked  monthly.  But  by  lengthening  the 
first  three  weeks  of  the  month  by  a  little  over  an  hour, 
it  is  possible,  every  fourth  week,  for  all  employees  to  be 
free  from  four  o'clock  on  Friday  afternoon  till  starting 
time  on  the  following  Monday  morning.  The  night 
shift  at  this  establishment  is  shorter  than  the  day  shift, 
and  lasts  only  till  about  2  a.m.  As  it  is  worked  only  five 
nights  in  the  week,  and  receives  the  same  pay  for  shorter 
hours,  it  is  preferred  by  many  men,  who  stay  on  it  for 
years. 

At  Lever  Brothers'  it  is  proposed  to  adopt  two  shifts 
of  six  hours  instead  of  the  single  shift  of  eight  hours 
which  at  present  prevails.  This  proposal  is  so  important, 
both  in  relation  to  industry  and  to  welfare  in  its  more 
restricted  sense,  that  the  address  of  Lord  Leverhulme 
to  the  annual  meeting  of  shareholders  of  the  company, 
held  March  27,  1919,  deserves  quotation: 

"We  had  intended  to  do  this  twelve  months  ago 

We  have  now  worked  out  our  scheme,  and  I  may  tell  you  that 
all  the  trade  unions  consulted  are  most  anxious  to  make  the 
scheme  workable  and  satisfactory,  and  that  the  Government, 
as  far  as  the  state  of  the  law  will  permit,  are  equally  anxious. 
It  is  anticipated  that  the  consent  of  the  Home  Office  will  be 
given  to  the  draft  proposals  which  have  now  been  submitted 
to  them.  The  general  features  of  the  scheme  are:  first,  with 
regard  to  dayworkers  and  pieceworkers,  that  we  shall  work 
in  two  shifts  —  six  hours  each  shift.  The  morning  shift  will 
commence  at  7  o'clock,  and,  after  a  break  of  a  quarter  of  an 

219 


hour  from  8.45  for  some  light  refreshment,  they  will  continue 
until  1.15  P.M.  At  1.15  the  morning  shift  work  for  the  day 
will  be  over.  They  will  not  return  to  their  work  until  7  o'clock 
the  next  morning.  This  makes  a  total  of  six  working  hours 
per  day,  with  fifteen  minutes  break  for  a  meal,  for  six  days 
in  the  week  —  Monday  to  Saturday  included. 

"When  we  come  to  consider  the  afternoon  shift,  there  is  a 
strong  feeling  and  desire  to  retain  the  Saturday  afternoon  half- 
holiday,  notwithstanding  that  every  alternate  week  there 
will  be  a  whole  week  of  half-holidays:  and  to  meet  this  wish 
the  afternoon  shift  will  work  only  five  afternoons,  the  average 
being  7  hours  12  minutes  each  afternoon,  instead  of  six  after- 
noons of  six  hours.  Therefore  the  afternoon  shift  will  com- 
mence at  a  quarter  past  one  (there  will  be  a  break  of  half  an 
hour  for  refreshment  from  4.45  to  5.15  p.m.)  and  will  stop 
at  9  P.M.,  but  on  Friday  work  will  stop  a  quarter  of  an  hour 
earlier,  at  8.45,  so  that  the  weekly  average  is  36  hours." 

For  workers  in  continuous  processes  another  readjust- 
ment was  necessary.  The  three  shifts  of  eight  hours  were 
to  become  four  shifts.  In  order,  however,  that  the  home 
life  should  be  as  little  disturbed  as  possible  by  the  night 
shift,  that  shift  was  to  work  8  hours,  from  10  p.m.  until 
6  A.M.  But  as  the  shifts  were  changed  weekly,  and  the 
remaining  16  hours  of  each  day  were  divided  Into  three 
shifts,  each  worker  on  these  processes  would  have  short 
days  for  three  successive  weeks  to  counterbalance  this 
longer  night  shift. 

Two  other  points  In  connection  with  the  scheme  should 
be  noted.  The  light  meals  given  to  the  morning  and 
afternoon  shifts  are  to  be  provided  at  the  firm's  expense. 
This  is  done  in  order  to  simplify  the  catering,  and  save 
time  and  trouble.  The  refreshments  will  consist  of  tea, 
coffee,  cocoa,  bread  and  butter,  and  sandwiches. 

Further,  "the  rate  of  wages  will  be  exactly  the  same 
for  a  36-hour  week  as  for  a  48-hour  week."  This  state- 
ment, while  not  explicit  in  Itself,  seems,  when  taken  In 
connection  with  the  context,  to  Imply  that  the  rates  per 
hour  or  per  piece  would  be  so  adjusted  as  to  give  the  same 
earnings  for  the  shorter  week.  Throughout  his  argument 
Lord  Leverhulmc  seems  always  to  have  guaranteed  the 
same  total  wage  earnings,  but  to  have  taken  the  risk 
of  not  securing  the  same  production  In  6  hours  as  In  8 
hours. 

220 


§  7.     Housing 

Each  of  the  welfare  schemes  investigated  has  a  housing 
scheme  attached.  The  two  best  known  are  those  of 
Cadbury's,  at  Bournville,  and  Lever  Brothers,  at  Port 
Sunlight.  The  little  village  of  New  Earswick,  near  York, 
about  one  mile  and  a  quarter  from  Rowntree's  establish- 
ment, is  much  less  known.  This  is  due  to  the  fact  that 
the  policy  of  this  firm  differs  from  that  of  Cadbury  and 
Lever  Brothers.  The  latter  describe  their  works  as 
"a  factory  set  in  a  garden."  The  villages  of  Bournville 
and  Port  Sunlight  are  far  more  pretentious  and  are  towns 
rather  than  villages.  They  are  adjacent  to  the  factories 
and  are  splendid  advertisements  of  the  firm.  The  York 
village,  however,  is  removed  from  Rowntree's  works  and 
is  obviously  designed  as  a  model  for  the  many  small 
villages  in  which  England  abounds.  It  was  founded  by 
Mr.  Joseph  Rowntree,  the  senior  member  of  the  firm, 
just  as  Bournville  was  founded  by  Mr.  George  Cadbury, 
senior,  the  senior  member  of  the  firm  of  Cadbury  Brothers. 
Both  are  now  under  the  care  of  village  councils  which 
are  further  under  the  supervision  of  the  Charity  Com- 
missioners. 

The  village  of  New  Earswick  is  an  attempt  to  solve  the 
housing  problem  of  building  cottages  that  would  let  at  a 
rent  within  the  means  of  the  working  classes.  Wages  at 
York  and  in  the  vicinity  have  always  been  low,  so  that 
cottages  that  would  meet  this  need  must  necessarily  be 
unpretentious.  Those  in  New  Earswick  are  solid  and 
comfortable,  and  were  let  at  a  rate  varying  from  4  shillings 
to  8  shillings  ($L00  to  $2.00)  per  week  with  municipal 
rates  in  addition.  They  consist  generally  of  a  living  room, 
kitchen,  and  scullery  on  the  ground  floor,  and  two  or 
three  bedrooms  above.  They  have  a  fair  sized  tract  of 
ground  attached  to  them  for  a  garden. 

Bournville  has  nearly  1,000  houses  and  a  population 
of  over  4,000.  It  dates  back  to  1879,  though  the  greater 
part  of  the  building  dates  from  1895  onwards.  It  was  an 
attempt  to  make  the  home  surroundings  of  the  worker 
more  comfortable  and  conducive  to  efficiency. 

The  founder  is  desirous  of  alleviating  the  evils  which  arise 
from  the  insanitary  and  insufficient  accommodation  supplied 
to  large  numbers  of  the  working  classes,  and  of  securing  to 
workers  in  factories  some  of  the  advantages  of  outdoor  village 
life,  with  opportunities  for  the  natural  and  healthful  occupa- 
tion of  cultivating  the  soil. 

221 


The  rents  were  to  be  fixed  at  a  rate  accessible  to  persons 
of  the  laboring  and  working  classes,  without  being  so 
low  as  to  become  bounty  or  an  act  of  charity.  Prior  to 
the  war,  houses  here  also  were  let  on  the  estate  at  from 
4  shillings  to  8  shillings  per  week,  municipal  rates  extra. 

The  trusts  administering  these  two  estates  treat  them 
as  business  propositions.  The  income  received  from 
rents  and  every  other  source  is  received  and  administered 
by  the  trustees,  who  seek  to  show  that  the  housing 
scheme  is  not  an  act  of  philanthropy  but  a  financially 
practicable  scheme.  The  trustees  of  the  village  of  New 
Earswick  are  required  by  the  trust  deed  to  secure  a  net 
return  of  at  least  3}/^  per  cent  on  the  capital  outlay, 
while  the  Bournville  trustees  obtain  a  net  return  of 
nearly  4  per  cent  on  the  cost  of  the  site  and  buildings 
after  all  outgoings  have  been  provided  for. 

Neither  of  these  villages  is  reserved  entirely  for  the 
employees  of  the  firms  of  the  founders,  nor  was  it  intended 
primarily  for  them.  Only  from  30  to  40  per  cent  of  the 
inhabitants  of  each  village  are  employed  in  the  respective 
establishments. 

Port  Sunlight  is  different  in  many  regards  from  the 
two  villages  just  described.  It  is  a  little  larger  than 
Bournville,  containing  in  1917  over  1,100  houses  and  a 
population  of  4,600.  The  village  is  a  part  of  the  industrial 
organization  of  Lever  Brothers'  works,  and  cannot  be 
considered  apart  from  them.  It  is  reserved  entirely  for 
employees  of  the  firm.  It  is  connected  with  the  system  of 
"prosperity-sharing."  So  far  back  as  1900  the  founder  of 
the  village  declared: 

One  of  the  best  methods  for  the  application  of  the  principle 
of  Prosperity-Sharing  is  to  be  found  in  building  cottages  to 
be  let  to  labor  at  low  rentals. 

The  houses  at  Port  Sunlight  have,  therefore,  been 
built  out  of  the  profits  of  the  business.  They  have  not 
been  built  to  pay.  They  are  not  let  to  tenants  at  a  com- 
mercial rent,  but  at  one  just  sufficient  to  cover  upkeep 
and  repair.  No  charge  is  made  against  the  maintenance 
account  for  the  interest  on  the  capital  outlay.  The 
maintenance  account  in  1916,  which  just  about  balanced 
with  the  proceeds  from  rents,  was  nearly  £13,000,  while 
the  interest  on  capital  outlay  was  £31,507.  The  rents 
charged  for  the  cottages  before  the  war  varied  from  3  shil- 
lings 9  pence  to  8  shillings  6  pence  (90  cents  to  $2.00)  per 

222 


week,  including  rates  and  taxes.  It  is  obvious  that  the 
addition  to  the  rent  rate  of  the  interest  on  capital  outlay 
would  raise  the  rate  to  a  figure  far  above  the  average 
paid  hy  an  English  artisan.  In  addition  to  bearing 
the  burden  of  the  capital  outlay,  the  firm  looks  after  the 
upkeep  of  the  front  gardens  of  the  tenants,  and  of  the 
roads,  parks,  and  walks. 

§  8,     A  French  Example 

A  French  example  of  welfare  work,  of  mushroom  war 
growth,  is  the  factory  of  M.  Andre  Citroen  at  Quai  de 
Javel,  Paris.  In  1914  the  space  occupied  by  the  Citroen 
factory  was  in  large  part  covered  with  the  factories  of  the 
Acieries  de  France;  in  part  it  was  vacant  space  en- 
cumbered by  broken  masonry.  The  entire  area  is  twelve 
hectares  and  the  buildings  cover  eight  of  these. 

During  the  war  the  factory  made  projectiles,  but 
since  the  armistice  it  has  been  transformed  into  an  auto- 
mobile manufacturing  plant.  For  this  peace-time  purpose 
the  shops  are  being  rearranged  and  expanded  to  prepare 
for  the  manufacture  of  one  hundred  automobiles  per  day. 
A  standard  touring  car  at  a  moderate  price  is  to  be  made. 
The  manufacturing  process  is  patterned  after  what  M. 
Citroen  could  learn  from  the  technical  press  news  of 
American  methods.  The  routing  of  material  has  been 
carefully  thought  out  and  the  buildings  are  admirably 
arranged  in  this  particular.  It  is  the  intention  of  making 
from  raw  material  as  completely  as  possible;  he  is  there- 
fore making  his  own  gears,  steel  castings,  iron  castings, 
bronze   castings,  tubes,  forgings,  etc. 

As  a  war  factory  the  Citroen  plant  has  been  most 
successful.  M.  Citroen  attributes  a  large  part  of  his 
success  to  the  welfare  work  carried  on  in  his  plant.  Just 
as  the  British  manufacturers  said  they  were  doing 
welfare  work  as  business,  not  as  philanthropy,  so  here  the 
work  is  said  to  be  done  as  a  pure  matter  of  business  and 
not  as  a  philanthropy.  The  cost  for  welfare  work  during 
the  war,  when  the  plant  was  operating  at  maximum 
capacity,  was  not  more  than  3  per  cent  of  the  annual 
payroll  and  in  normal  times  should  not  exceed  4  per  cent. 

The  company  provides,  free  of  charge  to  employees, 
all  medical  services.  There  are  nurses  for  first  aid  service, 
a    surgical    room    with    attendant    surgeons,    a    "cabinet 

223 


dentaire,"  the  greatest  innovation  realized  at  the  Citroen 
plant,  for  all  sorts  of  dental  work,  an  infirmary,  and  a 
special  room  {dans  la  salle  speciale  de  la  Poupommiere) 
for  mothers  to  leave  their  babies  in  and  to  which  they 
come  at  stated  periods  for  nursing  them,  and  in  connec- 
tion with  it  a  kindergarten  for  older  children. 

The  Citroen  plant  has  also  a  restaurant  where  meals 
are  served  at  modest  prices,  a  dressing  room  for  the 
workers,  a  moving  picture  show,  an  employees'  club  with 
a  library,  six  billiard  tables,  card  tables,  and  lounge  room, 
a  writing  room  for  all  employees,  lavatories,  baths, 
and  a  co-operative  sales  room  for  foodstuffs,  work  gar- 
ments, and  so  forth. 

"They  work  with  an  air  of  content,  and  that  expression 
has  impressed  us  in  the  course  of  this  visit,  for  the  faces 
of  all  appear  to  reflect  it. 

"That  explains  itself;  the  personnel  of  the  Citroen  plant 
lives  in  healthy  shops;  it  carries  on  its  work  with  an 
equipment  and  according  to  methods  protected  as  much 
as  possible;  it  knows  that  a  true  intelligence  directs  the 
whole. 

"This  personnel  understands  also  that  one  has  not 
desired  to  see  in  it  only  a  machine  for  labor,  but  that 
one  has  had  care  for  its  health,  for  its  well-being,  for  its 
intellectual  life,  that  one  treats  it  with  dignity,  in  seeking 
to  furnish  it  the  opportunity  to  elevate  its  moral  char- 
acter; it  feels,  not  alone  an  intelligence  but  a  heart  directs 
them."i 

There  had  been  only  two  general  strikes  in  the  Citroen 
shops  during  the  war.  One  was  a  part  of  a  general 
strike  throughout  the  country  for  more  wages;  the  other 
was  a  general  strike  for  peace.  About  two  weeks  after 
our  interview  with  M.  Citroen  there  was  a  local  strike 
there  for  higher  wages  and  other  changes  in  working 
conditions.  We  were  not  advised  of  the  outcome  of  the 
strike,  but  we  were  given  to  understand  that  M.  Citroen 
had  decided  to  inaugurate  a  shop  committee  plan  of 
liandHng  labor  disputes. 

An  expression  of  attitude  by  a  labor  official  was  obtained 
by  your  Commission.     Said  this  official: 

1   am  opposed  to  the  welfare  methods  of  M.  Citroen.     I 
think  employers  should  give  the  workmen  a  good  plant  and 

'  "Unc  Visile  aux  Usinc  Andre  Citrijcn."    Booklet  published  by  M.  Citroen. 

224 


should  help  them  to  get  high  production,  but  should  cut  out 
"fancy"  welfare  work. 

It  is  likely,  however,  that  these  things  really  appeal  to 
French  workpeople.  The  veteran  labor  leader,  M.  Rivelli, 
of  the  seamen's  union  and  of  the  C.  G.  T,,  said  to  the 
delegates  of  the  International  Seafarers'  Conference  in 
London,  February  25,  1919: 

The  French  Seamen  prefer  their  own  laws  to  the  American 
Seaman's  Act,  because  the  French  workman  is  not  primarily 
interested  in  wages,  but  in  the  conditions  under  which  he 
works.  He  wants  to  be  comfortable,  to  have  as  much  freedom 
as  possible,  so  that  tasks  do  not  become  too  irksome. 

There  can  be  no  doubt  that  the  Citroen  plant  has  made 
a  name  for  itself  throughout  France,  and  is  a  notable 
instance  of  the  adoption  of  the  latest  ideas  in  welfare 
work. 

§  9.     Criticism 

The  schemes  above  described  represent  the  efforts  of 
three  of  the  most  progressive  employers  of  England  and 
one  of  France  to  improve  the  human  relations  which  lie 
behind  industrial  relations  of  employers  and  employed. 
All  these  employers  are  averse  to  their  efforts  being 
considered  a  sort  of  "philanthropic  addendum"  to  busi- 
ness.     Rowntree  &  Company  consider  that  such   work, 

"if  conceived  and  carried  out  on  right  lines  and  in  the  right 
spirit,  undoubtedly  pays  from  a  purely  business  standpoint. 
It  means  the  humanizing  of  business  relationships,  and 
consequently  the  bettering  of  conditions  of  labor,  and  the 
greater  contentment  of  the  workers.  Men  who  are  well  paid, 
who  work  under  good  auspices,  and  feel  that  their  employers 
desire  to  treat  them  with  justice  and  consideration,  are  not 
only  more  cheerful,  but  more  vigorous,  than  those  who  are 
merely  regarded  as  machines."^ 

Lord  Leverhulme  Is  most  emphatic  in  this  view  that 
there  is  no  philanthropy  in  business.  Speaking  of  the 
need  of  co-operation  between  management  and  labor, 
he  said: 

"The  only  way  these  two  can  create  a  fund  to  increase  pro- 
fits —  out  of  which  wages  and  profits  are  paid,  out  of  which 
it  is  possible  to  pay  the  highest  rate  of  dividends  and  wages 
—  is  to  increase  the  quality  of  the  product  and   increase   the 
^  Rowntree  &  Co.:  "Industrial  Betterment  at  the  Cocoa  Works,  York,"  p.  8. 

225 


quantity  of  the  product:  that  can  be  done  only  by  becoming 
more  efficient.  It  cannot  be  done  by  working  a  greater  or  less 
number  of  hours;  it  can  be  done  only  by  making  men  in  every 
way  more  efficient."  ^ 

Referring  to  his  system  of  copartnership,  he  asserted: 

"The  cultivation  of  a  spirit  of  copartnership  and  of  a  keen 
interest  in  the  firm  in  which  the  employee-workers  are  en- 
gaged, is  not  philanthropy  but  sound  policy."^ 

In  a  speech  at  Port  SunHght,  in  1914,  he  explained  his 
aim  as: 

The  desire  to  try  and  make  an  industrial  community  that 
would  be  producing  more  goods  and  better  goods,  earning 
higher  wages  in  fewer  hours,  and  be  better  conducted,  better 
developed,  better  trained,  and  better  fed  than  any  other 
community  in  the  same  business.^ 

In  short,  it  must  be  acknowledged  that  these  schemes 
are  the  efforts  of  highly  successful  employers  to  establish 
their  businesses  upon  a  basis  of  fair  dealing  and  of  a  wide 
and  comprehensive  interest  in  the  human  welfare  of  those 
who  are  in  their  employ.  No  one  can  deny  the  large 
measure  of  success  these  schemes  have  met  with.  Their 
success  can  be  explained  in  various  ways: 

1.  The  schemes  have  been  a  splendid  advertisement 
for  the  firms.  Prof.  Sir  William  J.  Ashley,  commenting 
on  this  obvious  fact,  regards  it  as  one  that  "shows 
there  is  such  a  thing  as  a  consumers'  conscience,"  and  as 
significant  because  it  reveals  a  correlation  between  what 
is  known  as  "good  business"  and  the  manufacture  of  goods 
under  satisfactory  working  conditions. 

2.  The  schemes  tend  to  reduce  working  "costs." 
"Waste  not,  want  not"  is  the  copartnership  motto  in 
Lever  Brothers'  establishment,  and  "anti-waste"  bulletins 
are  as  conspicuous  in  their  factories  as  are  the  "safety 
first"  bulletins  previously  mentioned.  But  just  as  im- 
portant as  the  prevention  of  waste,  both  in  respect  of 
time  and  materials,  is  the  better  adaptation  of  the  full 
mental  and  physical  powers  of  the  employee  to  his  work 
which  results  from  stress  on  the  human  clement. 

'  Lord   I.cvcrhuliiic:  "The  Six-IIonr  Day  and  other  Industrial  Questions," 
1018,  p.  07.     For  M.  Citroen,  see  above,  p.  223. 
« Ibid.,  p.  304. 
*  Progress,  journal  of  Lever  Brothers,  July,  1914,  p.  39, 

226 


The  founders  of  these  schemes  are  all  men  of  large 
vision  and  of  keen  business  sense.  They  are  the  per- 
sonalities behind  the  schemes,  which,  in  the  hands  of 
smaller  men  would  probably  not  achieve  such  success. 
Their  efforts,  which  never  stagnate  nor  reach  a  climax 
of  satisfaction,  are  dominated  by  an  impelling  motive 
of  social  service. 

In  criticism,  however,  it  should  be  said  that  a  large 
element  of  paternalism  enters  into  their  plans.  In  the 
case  of  Rowntree  and  Cadbury,  this  is  largely  unconscious. 
Mr.  B.  Seebohm  Rowntree,  in  an  interview,  said  he  had 
come  to  regard  welfare  work  as  too  paternalistic  to  agree 
with  modern  democratic  notions.  At  Cadbury's  there 
is  an  ever-present  sentiment  in  favor  of  the  participation 
of  the  employees  in  the  control  of  the  various  recreational, 
educational,  and  social  activities  comprised  in  the  scheme. 
Though  the  firm  has  so  many  betterment  plans,  it  has 
no  welfare  supervisor  nor  any  employment  manager. 
The  firm  supplies  the  institutions  and  machinery,  but 
does  not  seek  to  control  their  entire  working. 

On  the  other  hand,  the  control  of  Port  Sunlight  is 
undoubtedly  paternalistic.  Lord  Leverhulme,  whose  per- 
sonality has  a  great  attraction,  on  whatever  side  he  may 
be  approached,  is  the  dominating  element  in  the  industrial 
and  civic  organization  of  the  village.  Yet  there  are 
elements  of  opposition  and  reaction  to  this  paternalism. 
The  administrative  staff  of  the  works  used  to  live  in 
Port  Sunlight  alongside  of  the  employees.  The  latter 
came  to  feel,  however,  that  oversight  was  thereby  being 
extended  from  the  works  to  the  village,  and  that  men 
were  discriminated  against  in  the  works  for  events  in  the 
village  life.  The  trouble  grew  so  acute  that  Lever 
Brothers  withdrew  the  managers  from  the  village,  and 
they  no  longer  live  there. 

The  Citroen  plant  is  yet  too  new  in  experience  for  any 
deduction.     So  far  it  is  a  pronounced  success. 

Yet,  notwithstanding  these  criticisms,  one  must  admit 
the  intimate  connection  which  exists  between  the  success 
and  efficiency  of  these  companies  and  the  fair  dealing  and 
co-operation  which  exists  between  them  and  their  em- 
ployees. 


227 


CHAPTER   XV 
INTRODUCTION  TO  POLITICAL  LABOR  MOVEMENT 

§  1.     Function  of  the  State 

In  considering  the  outside  influences  which  may  at 
times  enter  to  affect  the  adjustments  between  individual 
employers  and  their  workers  the  most  important  are 
those  arising  from  the  action  of  the  Government.  There 
is  general  agreement  that  the  state  should  at  least  afford 
protection  to  the  life  and  property  of  all  citizens,  rich 
or  poor.  This  fundamental  right  is  more  necessary  to 
the  poor  than  to  the  rich,  because  the  former  may  not 
be  able  to  replace  a  loss  out  of  other  wealth.  He  suffers 
most  who  loses  all.  Thus,  if  only  one  horse  is  taken,  the 
enforcement  of  rights  to  property  are  more  important  to 
the  owner  of  one  horse  than  to  the  owner  of  a  hundred 
horses. 

The  functions  of  modern  government,  however,  extend 
beyond  the  mere  protection  of  life  and  property.  In  other 
words,  the  right  of  property  and  the  industrial  relations 
of  men  have,  with  the  growth  of  new  conditions,  become 
more  or  less  complicated.  The  face  of  the  business 
world  has  been  changing;  with  new  methods  of  trade, 
the  abolition  of  distance,  the  rise  of  the  corporation,  the 
change  in  ways  of  transportation,  the  coming  of  the 
era  of  new  power,  the  rights  of  individuals  in  all  these  new 
relations  have  become  complex  and  in  need  of  definition. 
In  the  regulation  of  monopolies  and  commercial  opera- 
tions new  and  difficult  problems  are  legion.  In  this 
extension  of  the  field  of  business  activity  there  arise  new 
questions  as  to  the  true  policy  of  the  state.  On  the  one 
hand  it  is  assumed  that  the  state  should  confine  itself 
to  a  pure  laissez-faire  policy;  on  the  other,  that  it 
should  interfere  whenever  possible.  On  such  matters  an 
insight  arising  from  experience  is  now  inclining  men  to 
think  there  is  no  hard  and  fast  obligation,  no  burden  of 
proof  either  in  favor  of  or  against  an  intervention  of 
the  state.  Each  particular  case  should  be  decided  on 
its  merits. 

228 


In  such  a  procedure,  however,  there  Is  a  general  prin- 
ciple governing  the  purpose  of  the  state.  The  essential 
aim  of  democratic  society  should  be  to  allow  the  largest 
possible  liberty  to  the  individual  consistent  with  the 
rights  of  others;  that  is,  each  individual  can  have  the 
largest  liberty  only  under  law.  It  should  be  the  purpose 
of  government  to  develop  the  greatest  possible  individual 
initiative  and  enterprise  in  industry  limited  only  by  the 
accepted  rights  of  other  members  of  society.  The  com- 
plexity of  the  modern  laws  of  property  are  due  mainly 
to  the  necessity  of  defining  and  justly  protecting  the 
rights  of  each  citizen.  On  this  basis  the  state  cannot 
interfere  in  industry  to  further  the  claims  of  one  class 
against  another  class.  It  must  act  impartially  and  only 
in  the  interests  of  society  as  a  whole,  as  demanded  by  the 
majority  of  its  voters.  To  impose  the  opinion  of  a  small 
group  upon  the  state  as  a  whole  is  tyranny. 

In  actual  practice,  as  seen  by  your  Commission  in 
Europe,  there  has  been  no  little  intervention  by  the  state 
with  the  operations  of  industry.  It  is  a  question  whether 
such  action  has  had  for  its  end  the  largest  individual 
liberty  of  the  citizen  consistent  with  the  full  recognition 
of  the  rights  of  others.  Nor  is  the  reason  for  this  short- 
coming in  the  particular  field  of  the  relations  of  employers 
to  their  workers  hard  to  discover.  The  state  can  act  only 
through  the  men  chosen  as  its  officials.  In  a  democracy 
these  men  obtain  place  chiefly  by  political  methods. 
In  the  very  nature  of  things,  the  agents  of  the  state,  when 
they  approach  an  industrial  dispute,  are  outsiders;  and 
the  problem  is  inevitably  treated  with  an  eye  to  its  effect 
on  the  political  fortunes  of  the  government  in  power. 
That  is,  it  is  almost  impossible  not  to  transfer  the  solution 
of  an  industrial  difficulty  from  the  realm  of  economics 
into  the  realm  of  politics.  Under  such  motives  the 
development  of  the  largest  individual  enterprise,  out 
of  which  society  as  a  whole  would  gain  most,  will  not  be 
obtained. 

Since  government  officials  take  no  industrial  risks  and 
cannot  have  the  quality  of  action  due  to  the  possibility  of 
loss  or  gain,  it  stands  to  reason  that  a  policy  adopted  by 
the  individual  manager  to  secure  industrial  efficiency 
weighs  very  little  with  them.  If  such  a  policy,  however, 
should  violate  the  rights  of  others,  as  in  the  employment 
of  children,  or  by  Insanitary  or  dangerous  conditions, 
regulation  by  the  state  is  wholly  justified.      But  when 

229 


the  state  enters  to  regulate  the  wages  of  labor,  to  change 
the  operation  of  economic  laws  affecting  the  cost  of 
materials  and  the  prices  of  goods,  it  cannot  be  fair  and 
just  to  all  parties  concerned  unless  it  is  omniscient  and 
omnipresent.  That  democratic  government  can  be  all 
that,  no  one  pretends.  Moreover,  in  the  countries 
visited,  it  should  be  remembered  that  the  attitude  of  the 
state  was  everywhere  aiTected  by  the  long-continued 
preaching  of  socialism,  in  whose  tenets  a  resort  to  the 
state  for  industrial  control  is  an  essential  doctrine.  It 
is  to  be  noted,  therefore,  that  an  exaggerated  dependence 
on  the  state  was  to  be  found  in  all  measures  relating  to 
labor,  even  in  the  circles  determining  the  terms  of  peace  at 
Paris.  The  effect  of  socialistic  doctrine  in  coloring  the 
situation  in  Great  Britain,  France,  and  Italy  must  be 
always  kept  in  mind. 

§  2.     Political  vs.  Industrial  Action 

Organized  labor  has  had  two  general  methods  of  action 
to  secure  its  desired  ends.  One  of  these  is  called  industrial 
action  and  the  other  political  action.  Industrial  action 
has  been  discussed  in  detail  in  previous  chapters.  It  was 
there  shown  that  this  is  an  appeal  to  force,  that  its  mani- 
festations are  strikes,  sabotage,  "ca'canny"  methods;  that 
is,  "direct"  industrial  action.  Political  action,  on  the  other 
hand,  means,  first,  to  secure  through  the  election  or 
control  of  political  representatives  a  predominating 
influence  in  the  existing  Government  In  order  to  obtain 
favorable  legislation;  second,  the  active  part  that  the 
Government  has  played  and  is  playing  in  an  attempt  to 
settle  the  difficult  labor  problems,  and,  third,  in  general 
the  application  of  the  principle  that  the  relation  between 
employers  and  employed  Is  a  matter  for  legislative  action. 

Where  the  powers  of  Government  are  brought  into  play, 
there  Is  a  third  party  to  every  controversy.  Its  interests 
are  supposed  to  be  broad  enough  to  cover  those  outside 
of  any  Immediate  industrial  disagreement.  Presumably, 
it  is  not  a  disinterested  third  party,  therefore,  but  a  more 
broadly  and  profoundly  interested  party  than  cither  of  the 
others.  It  has  been  found  that  the  Government  in  Great 
Britain  and  on  the  continent  has  been  not  only  an  inter- 
ested but  also  an  active  third  party  In  the  general  rela- 
tionship between  employers  and  employed. 

It  Is  with  political  action  that  this  discussion  has  chiefly 
to  do.     There  should  be  no  preconception  that  political 

2:m 


action  is  in  itself  wrong.  It  has  a  legitimate  field  of 
endeavor;  its  misuse  and  its  abuse  alone  are  to  be  con- 
demned. It  is  only  a  method,  and  it  is  the  motive  behind 
it  that  is  really  important.  A  general  survey  will  be 
made  here  to  show  what  political  forces  are  being  used 
by  labor  organizations  to  secure  their  ends  and  what 
motive  lies  behind  them,  what  active  part  Government 
has  taken  in  labor  controversies,  and  what  the  resulting 
situation  is  internationally.  Organized  labor  in  Great 
Britain  has  turned  toward  political  action  during  war, 
so  that  particular  emphasis  will  be  laid  upon  activities 
there.  In  less  detail  the  situation  in  France  and  Italy 
will  be  sketched. 

In  taking  up  the  discussion  of  political  influences  as 
they  have  had  to  do  with  labor  problems,  It  is  necessary 
to  keep  clearly  in  mind  the  distinction  between  the 
methods  of  socialism  and  the  methods  of  unionism. 
Without  attempting  to  record  all  the  shades  of  difference, 
it  may  be  said  that  the  broad  distinction  between  the 
two  is  that  trade  unionism  looks  primarily  to  industrial 
methods  and  that  socialism  looks  primarily  to  political 
methods.  By  this  definition  it  will  be  seen  that  socialist 
parties  are  essentially  political  in  their  activities,  while 
trade  unions  are  primarily  interested  in  industrial  action 
and  will  use  political  action  only  incidentally.  It  has 
been  said  by  a  well-known  writer^  on  this  subject  that: 
"The  average  workingman  has  a  much  more  important, 
necessary,  and  continuous  function  to  fill  as  a  member 
of  the  Labor  Unions  than  as  a  member  of  the  Socialist 
Party."  It  is  necessary  at  once,  however,  to  add  an 
important  qualification,  namely,  that  this  distinction  is 
not  true  of  Great  Britain.  The  dominant  political  party 
which  there  represents  the  labor  interests  is  the  British 
Labour  Party  and  it  is  not  in  inception  or  primary  purpose 
a  socialist  party.  A  clear  idea  of  the  European  situation 
can  be  gained,  however,  only  by  keeping  in  mind  that 
the  trade  union  movement  is  primarily  an  industrial 
movement  and  that  the  socialist  movement  is  primarily 
political. 

§  3.     Labor  in  Parliament 
Labor   interests    are   represented    more   extensively   In 
foreign  legislative  bodies  than  Is  true  of  the  United  States. 
In  the  French  Chamber  of  Deputies  out  of  a  total  member- 

1  Walling:  "Socialism  As  It  Is,"  p.  380.     Macmillan,  1913. 

231 


ship  of  602,  there  were  102  Unified  Socialists  and  30 
Independent  Socialists,  making  a  total  of  132  representa- 
tives of  the  workers'  interests.  This  was  for  the  year  1916. 
In  Italy  the  Chamber  of  Deputies  consists  of  508  mem- 
bers, of  whom  77  are  Socialists  and  3  Syndicalists.  In 
Great  Britain,  out  of  670  members  of  the  House  of 
Commons,  the  Independent  Labour  Party  had  36  repre- 
sentatives in  October,  1918.  In  the  present  coalition 
government,  the  Labour  Party  has  59  members  of  Parlia- 
ment out  of  700,  and  polled  at  the  December,  1918,  elec- 
tion 25  per  cent  of  the  total  vote.  These  figures  show 
that  labor  organizations  in  Great  Britain  and  on  the  con- 
tinent have  been  active  in  politics  and  are  sufficiently 
strong  to  have  a  good  representation  in  legislative  bodies. 


§  4.     Labor  in  the  Cabinet 

Not  only  has  labor  now  a  strong  representation  in  the 
Parliaments  of  European  governments  but  it  also  has  a 
Cabinet  member  appointed  in  its  interest  in  the  Cabinets 
of  England,  France,  and  Italy.  There  is  in  each  of  these 
governments  a  special  department  called  the  Ministry 
of  Labor  that  is  given  over  exclusively  to  the  interests  of 
labor.  During  these  periods  of  industrial  unrest  these 
Ministries  of  Labor  have  been  active  in  response  to  the 
very  difficult  problems  which  have  faced  them. 

Under  the  unusual  conditions  brought  about  by  the 
European  war  Special  Committees  have  been  appointed 
to  meet  the  emergency  problems  that  have  arisen.  An 
illustration  of  these  Special  Committees  is  to  be  found  in 
the  Reconstruction  Committee  appointed  by  the  British 
Government.  It  had  a  sub-committee  whose  particular 
duty  it  was  to  inquire  into  relationships  between  employers 
and  employed.  The  activities  of  this  sub-committee  are 
of  considerable  importance  and  will  be  discussed  in  detail. 
But  prior  to  the  war  the  British  Government  had  often 
stood  as  arbitrator  between  the  employers  and  the  work- 
ingmcn.  "For  many  years  the  [British]  Government 
represented  by  Mr.  Lloyd-George  or  Mr.  Winston 
Churchill  had  acted  as  arbitrator  in  every  great  industrial 
conflict  and  had  secured  many  minor  concessions  for 
the  Unions."'  The  Liberal  Party,  under  the  leadership 
of  Mr.  Asquith,  has  also  been  sympathetic  to  labor. 

*  Walling:  "Socialism  As  It  Is,"  p.  :561. 

232 


§  5.     International  Political  Labor  Movement 

A  movement  had  gained  considerable  headway  prior 
to  the  war  to  unite  workingmen  of  all  countries  into  a  single 
organization.  To  understand  the  existing  situation  it  will 
be  necessary  to  give  a  brief  survey  of  the  development 
of  this  great  movement.  Plans  for  an  international 
convention  had  been  made  for  Vienna  in  1914  which  was 
interrupted  by  the  declaration  of  hostilities.  It  is  inter- 
esting to  note  that  one  of  the  chief  themes  at  this  conven- 
tion was  to  be  the  attitude  of  workingmen  toward  war. 
Several  attempts  were  made  during  the  conflict  to  get 
international  representation  at  a  meeting  in  some  neutral 
country.  While  they  were  largely  unsuccessful,  there  was 
held  at  Berne,  Switzerland,  on  February  3,  1919,  an  inter- 
national convention  of  socialists  and  of  trade  unions. 
These  two  meetings,  while  distinct  in  organization  and  in 
purpose,  yet  worked  together  in  close  co-operation.  The 
chief  result  of  these  meetings  was  the  Labor  Charter 
which  was  presented  to  the  Peace  Conference  at  Paris. 
On  February  24,  1919,  there  met  in  London  the  Interna- 
tional Seafarers'  Conference.  At  this  convention  were 
representatives  of  the  most  important  Seamen's  Unions 
from  all  the  principal  maritime  countries  in  Europe,  except 
Germany  and  Holland.  Delegates  were  sent  from  the 
United  States  who  took  a  leading  part  in  this  convention. 
The  culmination  of  the  international  movement,  however, 
has  undoubtedly  been  the  formation  of  a  Commission  on 
International  Labor  Legislation  which  met  in  connection 
with  the  Paris  Peace  Conference.  The  results  of  this 
Commission  are  so  important  as  to  deserve  individual 
discussion. 

§  6.     Dangers  of  Politics 

One  cannot  speak  of  political  action  in  connection  with 
the  labor  movement  as  if  it  were  a  matter  of  more  or  less 
indifference  to  choose  between  industrial  and  political 
action.  There  is  in  the  latter  an  inherent  danger  which 
does  not  belong  to  the  former.  Political  leaders  are  too 
often  not  broad-minded,  far-seeing,  socially  interested 
men.  The  very  nature  of  their  duties  takes  them  out  of 
the  workshop  and  direct  contact  with  industry,  as  British 
and  French  labor  spokesmen  have  so  often  declared. 
Preferment  is  secured  by  them,  not  through  efficient 
production  or  any  other  industrial  achievement,  but  by 

233 


securing  votes.  And  vote-getting  is  a  profession  in 
itself,  wherein  opportunism,  the  immediately  expedient 
action,  is  a  large  factor.  The  shadow  of  a  coming  election 
falls  far  before  it. 

Not  only  does  political  activity  have  a  non-industrial 
basis,  but  the  subject  matter  of  industrial  problems 
also  is  in  large  part  not  suited  for  legislative  action. 
Many  industrial  problems  are  individual  to  a  plant  and 
of  technical  character.  To  meet  them  effectively  there 
is  need  for  an  intimate  familiarity  with  the  industry  and 
for  a  flexible  and  quickly  adjustable  arrangement.  Mem- 
bers of  legislative  bodies  cannot  furnish  this  familiarity 
or  this  flexibility. 

And  one  further  point.  Where  the  Government  steps 
into  an  industrial  controversy  as  a  third  party  it  does 
not  and  cannot  express  the  judgment  and  will  of  the 
"public."  It  is  not  the  vox  poptili,  the  voice  of  the 
people,  that  speaks,  because  public  opinion  is  relatively 
slow  in  forming,  and  even  in  the  most  democratic  countries 
cannot  have  immediate  or  direct  expression.  The  group 
is  too  large  to  make  this  possible,  and,  besides,  political 
expediency  can  almost  never  be  eliminated.  The  govern- 
ment official  often  expresses  what  he  thinks  is  the  opinion 
of  the  public  or  even  what  he  wants  that  opinion  to  be. 


§  7.     Plan  of  Discussion 

It  is  proposed  to  pursue  this  survey  (a)  by  tracing  the 
development  in  Great  Britain  of  the  Whitley  Councils 
and  showing  their  political  significance;  (b)  by  treating 
in  the  same  way  the  Industrial  Conference  in  Great 
Britain;  {c)  by  giving  a  brief  survey  of  political  influences 
in  France,  and  {d)  in  Italy;  and  (e)  by  a  rather  full  discus- 
sion of  the  international  political  labor  movement. 


234 


CHAPTER  XVI 
THE  WHITLEY  PLAN 

§  1.     Precursors  of  the  Whitley  Plan 

In  Great  Britain  much  is  to  be  learned  as  to  the  wisdom 
of  the  intervention  of  the  third  party,  the  Government, 
in  the  settlement  of  disputes  arising  between  employers 
and  their  workers.  Such  intervention,  of  course,  was 
tentative  and  remote  in  the  beginning,  and  largely  the 
outcome  of  governmental  methods  during  the  war.  In- 
stead of  direct  entrance  into  the  affairs  of  individual 
establishments  the  Government  tried  to  establish  a 
general  plan  of  bringing  about  settlements  between 
workers  and  employers.  It  used  its  influence  to  have 
such  a  plan  adopted,  however  much  such  action  savored 
of  governmental  interference.  One  such  scheme,  supposed 
to  fit  in  with  previous  experience,  and  least  likely  to 
create  opposition,  was  the  Whitley  Plan,  to  which  no 
little  attention  has  been  drawn. 

Before  discussing  the  first  Whitley  Report,  which 
appeared  in  March,  1917,  it  is  important  to  point  out  that 
its  general  principles  had  long  been  under  examination 
and  had  even  been  put  into  practice  previous  to  its 
publication.  Of  course  the  idea  of  joint  boards  was  in 
any  case  familiar  to  English  industry,  because  employers 
and  labor  had  for  many  years  been  co-operating  on  joint 
conciliation  committees.  In  1913,  for  instance,  195 
boards  and  joint  committees  took  action  within  the  know- 
ledge of  the  Board  of  Trade,  and  together  they  dealt 
with  4,070  cases  of  dispute.  Their  success  is  evidenced 
by  the  fact  that  they  settled  2,283  cases;  291  cases 
were  settled  by  umpires  whom  the  boards  and  joint 
committees  appointed,  and  in  only  31  instances  did  any 
stoppage  of  work  occur.  In  some  cases  the  function  of 
these  boards  was  extended  to  cover  the  discussion  of 
grievances,  rates  of  pay,  and  similar  causes  of  dispute, 
even  before  an  actual  disagreement  had  arisen.  Reference 
to  these  boards  was  in  all  cases  voluntary.^ 

^  "  Labour,  Finance,  and  the  War,"  p.  33.    A.  W.  Kirkaldy,  Ed.   London,  1916. 

235 


Turning  to  the  more  immediate  precursors  of  the 
Whitley  Plan,  a  proposal^  made  by  Mr.  Malcolm  Sparkes, 
a  building  trades  employer  in  London,  to  the  unions  in 
the  building  trades,  called  for  industrial  representation 
in  a  "National  Industrial  Parliament  for  the  Building 
Industry."  This  plan,  offered  early  in  1916,  involved  the 
setting  up  of  district  boards  by  both  employers  and 
unions,  which  would  discuss  the  proposals  of  the  industrial 
parliament  and  furnish  local  facts  and  statistics.  A 
successful  trial  of  the  scheme  was  made  by  the  painters 
and  decorators.  It  was  subsequently  endorsed  by  the 
National  Associated  Building  Trades  Council. 

According  to  a  contemporary  account^  of  the  experi- 
ment in  the  Painting  and  Decorating  Trade,  the  National 
Council  was  to  have  met  four  times  a  year,  but  the  amount 
of  business  necessitated  its  meeting  twice  as  often.  The 
District  Councils  at  which  the  masters'  chairman  and 
the  men's  chairmen  presided  alternately,  met  regularly 
and  did  much  to  avert  and  to  settle  disputes.  A  notable 
spirit  of  harmony  and  co-operation  prevailed.  The 
chief  questions  under  discussion,  however,  were  equali- 
zation of  real  wages,  first  in  a  given  district  and  then 
on  a  national  scale;  prevention  of  unemployment  by 
better  organization  of  the  industry;  employment  of 
disabled  soldiers  on  such  terms  that  their  pension  shall 
not  be  allowed  to  depress  the  wage  standard;  promotion 
of  technical  training  and  research;  conditions  of  ap- 
prenticeship; pooling  of  schemes  and  suggestions  for 
better  conduct  of  the  industry.  Considerable  progress 
in  fixing  a  standard  wage  was  made,  for  example,  in  the 
Manchester  area  and  in  Northeast  Lancashire,  where 
a  time-rate  for  painters  was  set.  The  chief  difficulty 
was  encountered  from  non-federated  employers  and 
unorganized  men,  who  did  not  conform  to  the  standard 
rate.  In  some  cases  employers  and  unions  co-operate 
to  force  their  organization.  While  it  is  evident  that  the 
scheme  worked  toward  industrial  harmony  there  was  a 
certain  danger  to  the  general  public.  A  combination 
of  employers  and  employees  might  agree  to  raise  prices 
and  wages  to  the  detriment  of  the  consumer.  Yet  this 
appeared    rather    remote    in   contrast  with   the   real   ad- 

1  Harris,  H.Wilson:  "The  Whitley  Scheme  at  Work."  Contemporary  Review, 
December,  1917,  pp.  645-47. 

*  A  Memorandum  on  Self-Governmciil  in  Industry,  together  with  a  Draft  for  a 
Builders'  National  Industrial  Parliament,  I,ondf)ii. 

230 


vantages  gained  by  the  National  Painters'  and  Decorators' 
Joint  Council. 

At  a  convention  held  in  April,  1916,  representatives 
of  iron  and  steel  firms  appointed  a  committee  to  draw- 
up  a  plan  for  organizing  this  industry.  The  report  of 
this  committee  recognized  the  need  for  co-operation  with 
labor  and  recommended  the  formation  of  a  National 
Advisory  Council  of  Industry  composed  of  representatives 
of  employers  and  of  employees.  These  two  sections  might 
meet  either  jointly  or  separately.  The  meetings  should 
be  presided  over  by  an  impartial  Minister  of  Industry 
whose  appointment  or  retirement  should  not  be  dependent 
upon  a  change  of  government.  Local  councils  might  be 
formed  in  addition  to  the  National  Council. 

The  Londo7i  Times  of  December  11,  1916,  reported  a 
conference  of  Scottish  industrial,  commercial,  labor,  and 
agricultural  associations  which  favored  the  formation 
of  such  a  National  Advisory  Council  and  urged  the 
appointment  of  a  Minister  of  Industry. 

The  Garton  Foundation  published  a  memorandum^  in 
October,  1916,  which  had  already  received  the  suggestive 
criticism  of  employers,  representatives  of  labor,  and 
public  officials.  It  was  an  effort  to  offer  a  consistent 
program  for  the  after-war  situation  in  Great  Britain. 
Its  final  section  contained  recommendations  for  co- 
operative management  through  industrial  councils  and 
works  committees. 

In  Chambers  Journal  of  October  21,  1916,  an  article^ 
by  E.  T.  Good,  on  "The  Labour  Problem  and  Its  Solution," 
contained  the  following  recommendation : 

My  suggestion  is  that  in  all  our  large  industrial  establish- 
ments we  should  form  what  I  may  term  consultative  com- 
mittees. The  committees  should  consist  of  elected  representa- 
tives of  the  workmen  and  an  equal  number  of  foremen, 
managers,  directors,  or  shareholders.  They  should  meet 
regularly  and  freely  discuss  all  matters  affecting  the  works, 
the  men,  and  the  trade.  By  this  means  not  only  would 
valuable  improvements  often  be  proposed,  but  misunder- 
standings on  both  sides  would  be  cleared  up  and  many  griev- 
ances would  be  remedied  before  they  develop  into  disputes. 

1  Memorandum  on  the  Industrial  Situation  after  the  War.  The  Garton 
Foundation,  London,  October,  1916. 

^Good,  E.T.:  "The  Labour  Problem  and  its  Solution."  Chambers  Journal, 
October  21,  1916,  pp.  746-49. 

237 


Next  I  would  have  industrial  district  councils,  composed 
of  representatives  of  our  chambers  of  commerce,  employers' 
associations,  trade  unions,  and  friendly  societies.  These 
bodies  could  smooth  out  local  labor  troubles,  promote  good 
feeling  between  the  labor  and  capitalistic  organizations,  and 
give  advice  and  assistance  to  the  municipal,  educational,  and 
other  authorities. 

Finally  I  would  suggest  the  formation  of  a  national  council 
of  industry  composed  of  labor  leaders  and  representatives  of 
employers.  This  council,  besides  acting  as  a  supreme  tribunal 
in  such  labor  disputes  as  failed  to  be  settled  locally,  could 
conduct  inquiries  and  make  reports  and  recommendations 
upon  general  industrial,  commercial,  and  social  questions, 
supplying  workmen,  employers,  and  statesmen  with  informa- 
tion necessary  to  a  correct  understanding  of  the  problems  of 
labor  and  industry.  It  is  not  by  such  artificial  devices  as  co- 
partnership and  not  by  Government  interference  or  arbitration 
that  we  can  reasonably  expect  to  solve  the  labor  pioblem,  but 
by  the  spread  of  knowledge  and  by  voluntary  co-operation 
between  labor  and  organized  capital,  trade  unions  and  em- 
ployers' associations.  Let  us  have  labor  and  capital  jointly 
organized.  It  is  not  sufficient  that  the  labor  leaders  and  the 
representative  employers  come  together  only  on  the  occasion 
of  disputes.  We  want  them  to  work  together  constantly  in 
combination  for  the  common  good. 

Hence,  it  appears  that  the  principle  of  joint  councils 
for  constructive  industrial  work,  as  well  as  merely  for 
the  settlement  of  disputes,  had  been  brought  to  the 
foreground  by  persons  directly  engaged  in  industry 
even  before  the  publication  of  the  first  Whitley  Report 
by  the  Government  sub-committee. 

§  2.     First  Whitley  Report 

Comparatively  early  in  the  progress  of  the  war 
there  was  abundance  of  discussion  in  the  British  news- 
paper and  magazine  press  regarding  after-war  problems, 
particularly  in  relation  to  the  reconstruction  of  industry. 
I'he  radical  changes  in  the  labor  situation  caused  by  trade 
union  acquiescence  in  the  Treasury  Agreement  and  the 
subsequent  increase  of  Government  control  over  industry 
made  such  questions  loom  large  before  the  British  public, 
the  more  as  the  progress  of  the  war  was  accompanied 
by  ever  increasing  labor  unrest.  Numerous  public  and 
semi-public  associations  formulated  more  or  less  elaborate 
reconstruction    programs    and    from    various    sides    the 

238 


Government  was  urged   to  take  an  active  lead   in   such 
plants. 

In  March,  1916,  the  growing  demand  for  peace  pre- 
paredness led  to  the  setting  up  of  a  Reconstruction  Com- 
mittee by  the  British  Prime  Minister.  One  of  the  sub- 
committees appointed  was  that  officially  entitled  the 
Sub-committee  on  Relations  between  Employers  and 
Employed.  Set  up  in  October,  1916,  under  the  chairman- 
ship of  the  Right  Hon.  J.  H.  Whitley,  M.P.,  and  composed 
of  employers,  representatives  of  labor  and  of  the  Govern- 
ment, it  came  to  be  known  as  the  Whitley  Committee, 
its  reports  as  the  Whitley  Reports,  and  its  proposals  as 
the  Whitley  Plan. 

The  "terms  of  reference"  of  this  sub-committee  were: 

(1)  To  make  and  consider  suggestions  for  securing  a 
permanent  improvement  in  the  relations  between  em- 
ployers and  workmen. 

(2)  To  recommend  means  for  securing  that  industrial 
conditions  affecting  the  relations  between  employers  and 
workmen  shall  be  systematically  reviewed  by  those 
concerned,  with  a  view  to  Improving  conditions  in  the 
future. 

The  proposals  of  the  first  Whitley  Report,^  which 
appeared  in  March,  1917,  were  definitely  limited  to  those 
main  industries  "in  which  there  exist  representative 
organizations  on  each  side."  In  fact,  the  committee 
declared  its 

"considered  opinion  that  an  essential  condition  of  securing 
a  permanent  improvement  in  tlie  relations  between  employers 
and  employed  is  that  there  should  be  adequate  organization 
on  the  part  of  both  employers  and  workpeople." 

The  means  to  carry  out  the  agreements  and  arrangements 
made  for  the  several  industries  and  the  ultimate  success 
of  the  proposals  for  joint  co-operation,  it  was  stated, 
were  dependent  upon  this  organization.  No  attempt 
was  made  in  this  report  to  provide  for  the  unorganized 
industries. 

In  reply  to  a  question  by  the  Reconstruction  Com- 
mittee as   to  the  basis  for  determining  what  degree  of 

^  Great  Britain.  Reconstruction  Committee.  Sub-committee  on  Relations 
between  Employers  and  Employed.  Interim  Report  on  Joint  Standing  Indus- 
trial Councils,  p.  8.     London,  1917. 

239 


organization  would  justify  the  establishment  of  Industrial 
councils,  the  committee  offered  a  classification  contained 
in  the  Appendix.  In  somewhat  fuller  form  the  second 
report^  (October,  1917)  offered  the  same  grouping  as 
follows : 

Group  A.  Industries  in  which  organization  on  the  part 
of  employers  and  employed  is  sufficiently  developed  to 
render  their  respective  associations  representative  of  the 
great  majority  of  those  engaged  in  the  industry. 

Group  B.  Industries  in  which,  either  as  regards  employers 
or  employed,  or  both,  the  degree  of  organization,  though 
considerable,  is  less  marked  than  in  Group  A. 

Group  C.  Industries  in  which  organization  is  so  Imperfect, 
either  as  regards  employers  or  employed,  or  both,  that  no 
associations  can  be  said  adequately  to  represent  those  engaged 
in  the  industry. 

The  proposals  of  this  first  report  applied  solely  to 
Group  A. 

Expressing  the  view  that  "it  is  vital  that  after  the  war 
the  co-operation  of  all  classes  .  .  .  should  continue,  and 
more  especially  with  regard  to  the  relations  between 
employers  and  employed,"  the  specific  recommendation 
of  the  committee  to  secure  this  end  was  for  the  formation 
of  joint  standing  industrial  councils  in  the  several  in- 
dustries where  they  did  not  already  exist.  These  councils 
were  to  be  composed  of  representatives  of  employers 
and  employed  and  were  to  be  organized  on  a  national, 
a  district,  and  a  shop  basis.  The  National  Industrial 
Councils  were  to  be  organized  first  through  the  co- 
operation of  existing  employers'  associations  and  trade 
unions.  They  in  turn  should  develop  the  District  Councils 
and  Works  Committees.  The  details  for  these  joint 
committees  were  not  worked  out,  as  conditions  would 
necessarily  vary  in  the  difi^erent  industries,  and  as  it  was 
considered  desirable  that  the  scheme  adopted  should  be 
a  matter  for  agreement  between  the  employers'  associa- 
tions and  trade  unions  concerned. 

The  committee  had  defined  as  the  general  purpose  of 
such  representative  organizations, 

"the  regular  consideration  of  matters  affecting  the  progress 
and  well-being  of  the  trade  from  the  point  of  view  of  those 

'  Great  Britain.  Ministry  of  Reconstruction.  Commillec  on  Relations 
between  Employers  and  Employed,  p.  7.      L(jndon,  1918. 

240 


engaged  in  it,  so  far  as  this  is  consistent  with  the  general 
interest  of  the  community." 

Among  such  questions,  which  might  be  dealt  with  by 
National  Councils,  District  Councils,  or  Works  Com- 
mittees, according  to  the  decision  based  on  conditions 
in  the  particular  industry,  were  the  following: 

(I)     The  better  utilization  of  the  practical  knowledge  and 
experience  of  the  workpeople. 

(II)  Means  for  securing  to  the  workpeople  a  greater  share 
in  and  responsibility  for  the  determination  and 
observance  of  the  conditions  under  which  their  work 
is  carried  on. 

(III)  The  settlement  of  the  general  principles  governing  the 
conditions  of  employment,  including  the  methods  of 
fixing,  paying,  and  readjusting  wages,  having  regard 
to  securing  for  the  workpeople  a  share  in  the  increased 
prosperity  of  the  industry. 

(IV)  The  establishment  of  regular  methods  of  negotiation 
for  issues  arising  between  employers  and  workpeople, 
with  a  view  both  to  the  prevention  of  differences  and 
to  their  better  adjustment  when  they  appear. 

(V)  Means  of  ensuring  to  the  workpeople  the  greatest 
security  of  earnings  and  employment,  without  undue 
restriction  upon  change  of  occupation  of  employer. 

(VI)  Methods  of  fixing  and  adjusting  earnings,  piecework 
prices,  etc.,  and  of  dealing  with  the  many  difficulties 
which  arise  with  regard  to  the  method  and  amount 
of  payment  apart  from  the  fixing  of  general  standard 
rates,  which  are  already  covered  by  paragraph  (III). 

(VII)     Technical  education  and  training. 

(VIII)     Industrial  research  and  the  full  utilization  of  results. 

(IX)  The  provision  of  facilities  for  the  full  consideration 
and  utilization  of  inventions  and  improvements 
designed  by  workpeople,  and  for  the  adequate  safe- 
guarding of  the  rights  of  the  designers  of  such  im- 
provements. 

(X)  Improvements  of  processes,  machinery,  and  organiza- 
tion and  appropriate  questions  relating  to  manage- 
ment and  the  examination  of  industrial  experiments 
with  special  reference  to  co-operation  in  carrying  new 
ideas  into  effect  and  full  consideration  of  the  work- 
people's point  of  view  in  relation  to  them. 

(XI)     Proposed  legislation  regarding  the  industry. 

241 


The  committee  suggested  that  the  Government  put 
these  proposals  before  the  public,  the  employers'  and 
workpeople's  associations  with  the  request  that  they 
adopt  measures  for  the  establishment  of  National  In- 
dustrial Councils  where  they  did  not  already  exist.  The 
initiative  in  forming  councils  was  left  to  the  associations 
concerned.  The  Government  was  to  act  only  in  an 
advisory  capacity  at  the  preliminary  meetings  of  a  Council, 
if  desired,  and  stand  ready  to  furnish  such  helpful  in- 
dustrial information  as  was  at  its  disposal.  On  request 
of  a  council  the  Government  should  also  stand  ready  to 
nominate  a  chairman.  While  it  was  afiirmed  that  "the 
state  never  parts  with  its  inherent  overriding  power," 
it  was  the  view  of  the  committee  that  "such  power  may  be 
least  needed  when  least  obtruded." 

§  3.     Second  Whitley  Report 

The  second  Whitley  Report,^  which  appeared  in  October, 
1917,  after  classifying^  industries  as  A — organized,  B — 
partly  organized,  and  C — unorganized,  offered  proposals 
for  the  two  latter  groups.  The  plan  already  outlined  in 
the  first  report  could  be  adapted  to  Group  B.  As  many 
women  were  employed  in  these  industries,  it  was  sug- 
gested that  they  should  be  represented  on  the  councils. 
For  Group  C  the  establishment  of  Trade  Boards  appeared 
a  reasonable  solution,  but  with  a  legislative  extension 
of  their  powers  which  should  enable  them  to  initiate  and 
conduct  inquiries  on  all  matters  affecting  the  industry 
as  well  as  to  fix  a  mininmm  standard  of  wages  as  in  the 
past.  It  was  also  suggested  that  the  Trade  Boards  might 
facilitate  the  transition  to  Industrial  Councils  as  the 
industry  became  more  organized. 

The  modifications  of  the  Whitley  Plan  for  the  less 
organized  and  unorganized  industries  involved  a  con- 
siderable enlargement  of  Government  influence.  In 
the  case  of  Group  B  there  should  be  attached  to  the 
Council 

"one  or  at  most  two  representatives  of  the  Ministry  of  Labour 
to  act  in  an  advisory  capacity." 

It  was  not  proposed,  however,  that  these  Government 
representatives  should  possess  a  vote  or  that  they  should 

'  Great    Britain.      Ministry   of   Reconstruction.      Committee   on    Relations 
between  Employers  and  limployed,  p.  7.     London,  1918. 
''■  Ibid.     Sec  p.  6 

242 


remain  members  after  the  industry  became  further 
organized,  except  at  the  wish  of  the  Council.  Moreover, 
it  was  to  be  left  to  the  Ministry  of  Labour  and  the  or- 
ganizations concerned  to  determine  the  degree  of  organi- 
zation which  should  be  reached  in  an  industry  before  a 
National  Industrial  Council  should  be  established.  The 
Committee  explicitly  stated: 

"In  Group  C  industries  we  think  that  organization  will  be 
encouraged  by  the  use  of  the  powers  under  the  Trade  Boards 
Act,  and  where  National  Industrial  Councils  are  set  up  we 
recommend  that  the  'appointed  members'  of  the  Trade  Board 
should  act  on  the  Councils  in  an  advisory  capacity.  Briefly, 
our  proposals  are  that  the  extent  of  state  assistance  should 
vary  inversely  with  the  degree  of  organization  in  industries." 

§  4.     Third,  Fourth,  and  Final  Reports 

In  October,  1917,  the  Whitley  Committee  issued  a 
supplementary  report^  which  more  specifically  defined 
the  functions  of  the  Works  Committees,  organization  of 
which  had  been  recommended  in  the  first  and  second 
reports.  Rates  of  wages  and  hours  of  work,  in  the 
opinion  of  the  committee,  should  be  settled  by  district 
or  national  agreement, 

.  .  .  but  there  are  also  many  questions  closely  affecting 
daily  life  and  comfort  in,  and  the  success  of,  the  business,  and 
affecting  in  no  small  degree  efficiency  of  working,  which  are 
peculiar  to  the  individual  workshop  or  factory.  The  purpose 
of  a  Works  Committee  is  to  establish  and  maintain  a  system 
of  co-operation  in  all  these  workshop  matters. 

The  committee  made  no  definite  suggestions  for  a 
constitution,  feeling  that  details  should  be  adapted  to 
the  particular  circumstances.  It  emphasized  the  pre- 
supposition of  "frank  and  full  recognition"  of  employers' 
and  employees'  organizations  and  warned  against  the 
use  of  Works  Committees  in  opposition  to  trade  unionism. 

For  further  guidance  in  forming  works  committees  the 
committee  pointed  to  a  memorandum^  in  preparation 
by  the  Ministry  of  Labour  which  would  summarize 
existing  experience. 

^  Great  Britain.  Ministry  of  Reconstruction.  Committee  on  Relations 
between  Employers  and  Employed.  Supplementary  Report  on  Works  Com- 
mittees.    London, 1917. 

^  Report  of  an  Inquiry  as  to  Works  Committees  made  by  British  Minister  of 
Labour.  Reprinted  by  Industrial  Relations  Division.  U.  S.  Shipping  Board, 
Emergency  Fleet  Corporation,  Washington,  1919,  p.  131. 

243 


The  fourth  report^  of  the  Whitley  Committee,  pub- 
lished January,  1918,  dealt  with  conciliation  and  arbi- 
tration. The  committee  expressed  itself  as  opposed  both 
to  compulsory  arbitration  and  to  compulsory  prevention 
of  strikes  or  lockouts  pending  an  inquiry.  War  experience 
had  shown  that  compulsory  arbitration  did  not  prevent 
strikes  and  there  was  "no  reason  to  suppose  that  such  a 
system  is  generally  desired  by  employers  and  employed." 

While  the  continued  use  of  existing  machinery  for 
arbitration  and  conciliation  was  recommended,  the 
committee  also  advised  the  creation  of  a  Standing  Arbi- 
tration Council,  modeled  after  the  Wartime  Committee 
on  Production  to  which 

differences  of  general  principles  and  differences  affecting  whole 
industries  or  large  sections  of  industries  may  be  referred  in 
cases  where  the  parties  have  failed  to  come  to  an  agreement 
through  their  ordinary  procedure.  .  .  . 

The  importance  of  first  hand  knowledge  of  industry 
and  of  the  standpoints  of  employers  and  employees  was 
emphasized  for  members  both  of  the  tribunal  and  of  the 
staff  serving  it.  If  the  parties  concerned  agree,  cases 
might  be  settled  by  a  single  arbitrator. 

The  final  report-  of  the  Whitley  Committee  merely 
summarized  the  proposals  of  the  four  preceding  reports 
and  urged  their  wider  adoption.  Further  investigations, 
the  committee  felt,  could  be  more  profitably  undertaken 
by  the  joint  organizations  in  the  several  trades. 

A  note  appended  to  the  report  by  five  members  of  the 
committee  expressed  the  view  that,  however  Industrial 
Councils  might  further  industrial  peace  and  progress, 

a  complete  identity  of  interests  between  capital  and  labor 
cannot  be  thus  effected,  and  that  such  machinery  cannot  be 
expected  to  furnish  a  settlement  for  the  more  serious  conflicts 
of  interest  involved  in  the  working  of  an  economic  system 
primarily  governed  and  directed  by  motives  of  private  profit. 

§  5.     Government    Endorsement    of    Whitley    Plan 

Two  days  after  the  appearance  of  the  second  Whitley 
Report  the  Minister  of  Labour  sent  a  circular  letter  to 

'Great  Britain.  Ministry  of  Reconstruction.  Committee  on  Relations 
between  Employers  and  Employed.  Report  on  Conciliation  and  Arbitration, 
p.  5.     London,  1918. 

^  Great  Britain.  Ministry  of  Reconstruction.  Committee  on  Relations 
between  Employers  and  Employed.    Final  Report,  p.  4.    London,  1918. 

244 


employers'  associations  and  trade  unions  in  which  he 
recommended  the  formation  of  Whitley  Councils  in  the 
following    terms: 

The  Government  desires  it  to  be  understood  that  the 
Councils  will  be  recognized  as  the  official  standing  Consulta- 
tive Committees  to  the  Government  on  all  future  questions 
affecting  the  industries  which  they  represent,  and  that  they  will 
be  the  normal  channel  through  which  the  opinion  and  experi- 
ence of  an  industry  will  be  sought  on  all  questions  with  which 
the  industry  is  concerned.  It  will  be  seen,  therefore,  that  it 
is  intended  that  Industrial  Councils  should  play  a  definite  and 
permanent  part  in  the  economic  life  of  the  country,  and  the 
Government  feels  that  it  can  rely  on  both  employers  and  work- 
men to  co-operate  in  order  to  make  that  part  a  worthy  one. 

The  fundamental  reason  why  it  was  decided  by  the 
War  Cabinet 

"to  adopt  the  Report  as  part  of  the  policy  which  they  hope 
to  see  carried  into  effect  in  the  field  of  industrial  reconstruc- 
tion," 

was  explained  to  be  that 

"the  absence  of  joint  representative  bodies  .  .  .  had  been 
found  to  render  negotiations  more  difficult  than  they  would 
otherwise  have  been."  ' 

The  proved  value  of  a  Joint  Board  of  Control  in  the 
Cotton  Industry  was  cited. ^  Among  the  problems  which 
would  be  considered  with  the  Whitley  Councils  were 
mentioned  demobilization,  resettlement  of  munition  work- 
ers in  civil  industries,  apprenticeship,  training  and 
employment  of  disabled  soldiers,  control  of  raw  materials, 
and  settlement  of  the  more  permanent  questions  which 
have  caused  differences  between  employers  and  employed 
In  the  past. 


§  6.     Aim  of  Whitley  Plan  Different  from  that  of 
Works  Committees 

It  Is  to  be  noted  that  the  Whitley  Plan  had  a  different 
aim  from  that  of  Works  Committees.  The  latter  were 
intended  to  provide  a  means  of  communication  and  dis- 
cussion between  employers  and  workers  in  individual 
plants.  Whitley  Councils,  however,  while  hoping  to  do 
all  that  was  expected  from  Works  Committees,  had  an 

^  The  Cotton  Trade,  however,  refused  to  adopt  the  Whitley  Plan. 

245 


additional  purpose.  They  were  supported  by  the  Gov- 
ernment, with  the  intent  of  granting  something  in  the 
way  of  control  over  industry  to  the  workers.  Such  a 
purpose  was  even  put  forward  as  an  argument  in  their 
favor: 

"Assuming  that  attempts  are  made  to  set  up  committees, 
as  recommended  by  the  Report,"  he  said,^  "there  are  two 
main  directions  in  which  we  may  expect  good  results  almost 
immediately.  They  will  bring  employers  and  employed  into 
more  frequent  personal  contact,  and  will  so  tend  to  enable  each 
to  understand  the  difficulties  of  the  other,  and  remove  a  good 
deal  of  the  present  bitterness  of  feeling,  which  by  no  means 
necessarily  follows  even  from  deep  differences  of  principle.  If 
the  interests  of  employers  and  employed  will  still  be  different, 
it  may  at  least  help  them  to  respect  and  understand  one 
another.  Secondly,  the  Whitley  Report  goes  much  further 
than  any  previous  official  action  in  recognizing  the  right  of 
labor  to  a  share  in  the  control  of  industry.  It  not  only  gives 
increased  responsibility  to  the  leaders  of  labor,  but  also  to  the 
rank  and  file  in  the  shop  committees.  It  has  even  been  said 
that  the  educational  value  of  the  Whitley  Report  should  be 
such  as  to  evolve  gradually  a  new  type  of  industrial  citizen." 

While  the  relation  between  individual  employers  and 
their  workers  might  be  affected  in  minor  questions,  the 
same  writer  saw  that  the  fundamental  questions  would 
still  have  to  be  fought  out  on  the  national  field.  In 
considering  what  ultimate  result  might  be  expected  from 
the  general  adoption  of  the  proposals  of  the  Whitley 
Report,  he  felt  that  the  tendency  would  be 

"to  remove  the  small  causes  of  friction  and  misunderstanding, 
to  force  employers  and  employed  respectively  into  enormous 
single  organizations  covering  whole  industries,  and  in  each 
industry  to  leave  great  and  well  organized  armies  to  fight  out 
with  one  another  the  fundamental  questions  of  control  and 
reward." 

Although  some  employers  were  likely  to  try  to  find  in 
the  Whitley  Plan  a  refuge  against  the  radical  labor  ele- 
ments, their  approval  when  given  was  guarded.  The 
P'cdcration  of  British  Industries  approved  the  general 
principle  of  the  scheme.  Its  recommendations,  issued 
August,  1917,  stated  that:-^ 

'  Simon,  E.  I).:  "Labour  fnjin  an  Employer's  Point  of  View."  Contemporary 
Review,  May,  1918,  pp.  bhl-b'^. 

*  F'edcration  of  British  Industries:  "Industrial  Councils.  Recommendations 
on  the  Whitley  Report,"  p.  4.     London,  August  3,  1917. 

246 


The  Government  ought  to  go  far  to  recognize  and  give  an 
official  standing  to  organizations  representative  of  employers 
and  workpeople,  respectively,  and  to  encourage  the  develop- 
ment of  such  organizations. 

At  the  same  time  the  Federation  urged  that: 

There  should  be  no  suggestion  whatever  of  Government 
pressure  or  coercion,  and  that  each  trade  shall  be  free  to  build 
up  its  own  organization  voluntarily  and  on  lines  best  suited  to 
its  peculiar  needs. 

The  Federation,  however,  was  not  in  favor  of  entrust- 
ing constructive  work  to  district  or  works  councils. 
Although  they  might  bring  up  for  consideration  matters 
of  general  interest,  the  final  decision  should  be  a  function 
of  the  highest  council.  This  highest  council,  according 
to  the  Federation's  program,  should  be  composed  of 
representatives  of  employers  and  employed  from  all 
industries. 

In  a  later  report  by  the  Federation  of  British  Industries 
the  following  position  has  been  taken  on  Whitley  Councils: 

Generally  speaking,  we  think  that  the  objects  which  we 
have  in  view  can  best  be  obtained  by  carrying  out  with  all 
possible  speed  the  recommendations  of  the  Whitley  Report. 
In  regard  to  National  and  District  Industrial  Councils,  where 
the  conditions  of  the  trade  permit,  these  recommendations 
have  repeatedly  been  approved  by  the  Federation,  and  we 
desire  once  more  to  state  in  emphatic  terms  our  approval  of 
them,  and  especially  of  the  proposals  for  District  Councils.' 

It  is  further  declared  that  the  success  of  the  Whitley 
Councils  will  necessarily  depend  on  the  loyal  acceptance  of 
their  decisions  by  both  sides.  Some  Councils,  they 
declare,  have  already  applied  for  legislation  to  give  legal 
validity  to  their  decision. 

One  employer^  of  standing  wished  to  give  definition 
to  the  proper  functions  of  the  joint  standing  industrial 
councils  recommended  by  the  Whitley  Committee.  In 
the  first  place  such  a  council  "must  be  absolutely  debarred 
from  doing  any  work  that  can  be  done  by  an  individual." 
The  liberty  of  the  individual  to  carry  on  his  own  business 
In  his  own  way  must  be  preserved.  Nor  should  it  under- 
take duties  which  could  be  performed  by  any  sectional 

1  Federation  of  British  Industries:  "The  Control  of  Industry,  Nationalization, 
and  Kindred  Problems,"  p.  7.     July  30,  1919. 

2  Benn,  Ernest  J.  P.:  "The  Higher  Direction  of  Industry."  Contemporary 
Review,  June,  1918,  pp.  671-79. 

247 


organization,  employers'  organization  or  trade  union,  or 
by  any  group  of  employers  or  employed. 

With  these  reservations,  there  remained,  according 
to  Mr.  Benn's  view,  a  large  field  of  work  which  would 
include  readjustment  after  repeal  of  war  regulations, 
higher  control  of  industry,  especially  with  regard  to 
distribution  of  raw  materials,  redemption  of  trade  union 
pledges,  demobilization,  and  apprenticeships.  Beside 
these  immediate  problems,  suitable  permanent  activities 
for  the  joint  industrial  councils  would  be  the  encourage- 
ment of  scientific  research  and  education  and  the  organi- 
zation for  export  trade. 

By  the  Federation  of  Lace  and  Embroidery  Employers' 
Associations 

it  was  held  that  certain  subjects  mentioned  were  not  properly 
the  concern  of  workpeople  and  employers,  and  that  such  as 
supply  and  allocation  of  raw  materials,  financial  facilities  and 
stability  of  home  manufactures,  are  the  intimate  concern  of 
employers  and  their  associations  alone. 

But  in  the  main  there  was  a  more  favorable  attitude 
to  the  plan  among  employers  than  among  the  unions. 
The  railway  unions  and  the  miners  rejected  the  Whitley 
Scheme  because  they  were  demanding  that  the  workers 
should  control  the  railways  and  the  mines,  respectively. 
Moreover,  as  they  have  a  monopolistic  position,  they 
incline  to  favor  direct  action  to  secure  their  demands. 
That  the  same  view  is  influential  among  workers  in  the 
engineering  trade  is  demonstrated  by  the  speech^  of  J.  E. 
Mills,  of  the  Amalgamated  Society  of  Engineers,  at  the 
last  Trades  Union  Congress,  in  which  he  said: 

The  Whitley  Report  is  all  very  well  for  those  sections  of  in- 
dustry for  which  we  have  had  to  secure  justice  by  wage  boards 
and  other  items  of  state  interference,  but  when  the  organized 
workers  are  able  to  make  definite  claims  and  to  back  them  up, 
the  need  for  the  Whitley  Report  has  gone.  We  do  not  require 
the  Whitley  Report  and  I  hope  the  Congress  will  think  twice 
before  they  pass  any  resolution  accepting  the  principles  of  this 
report,  which,  after  all,  is  asking  us  to  lie  down,  the  lion  and 
the  lamb  together,  and  see  who  comes  out  of  it  with  most  of 
his  skin  left. 

A  similar  position  was  taken  by  W.  L.  Cooke,  of  the 
Locomotive  Engineers,  and  by  E.  H.  Jarvis,  of  the  Amal- 
gamated Carpenters,  who  claimed  that 

'  "  Trades  Union  Congress,"  p.  308.     Derby,  1918. 

248 


The  employers  are  making  preparations  to  secure  a  domina- 
tion of  the  worlcing  classes  after  the  war,  and  our  members  are 
taking  corresponding  measures  to  defend  their  position. 
Although  the  ideas  expressed  in  the  Whitley  Report  may  be 
good,  and  we  hope  they  may  be  worked  out  in  a  peaceful  man- 
ner, the  report  does  not  commend  itself  to  our  members.    .   .   . 

The  Whitley  Plan  has  been  rejected  In  a  number  of 
trades  because  they  already  had  agencies  in  existence 
which  were  fairly  satisfactory  to  both  sides. 

In  the  Cotton  Industry  the  Commission  were  told 

"that  the  employers  are  well  satisfied  with  their  present  plan 
for  collective  bargaining.  They  object  seriously  to  the  sub- 
stitution of  the  Whitley  Plan,  which  involves  bringing  in 
outsiders  not  selected  by  the  parties  to  the  dispute  and  who 
may  not  be  familiar  with  the  business.  A  stranger  to  the  busi- 
ness, even  though  his  impartiality  is  well  known,  cannot  judge 
correctly  of  the  relative  merits  of  the  controversy." 

Among  others  the  engineering  trade  unions  had  a 
definite  and  organized  system  of  negotiation  between 
employers  and  workers  and  claimed  that  their  scheme 
was  superior  to  that  of  the  Whitley  Committee.  The 
tinpiate  industry,  which  was  highly  organized,  also  had  a 
successful  system  of  conciliation  which  the  members 
refused  to  jettison  in  favor  of  the  Whitley  Scheme. 

The  Building  Trades  adopted  a  plan  of  their  own, 
January  30,  1918,  saying  that: 

If  this  scheme  is  not  accepted  by  the  industry  they  would 
have  foisted  on  them  by  the  Government  a  scheme  under 
which  the  Government  would  have  the  selection  of  representa- 
tives. They  felt  that  the  scheme  sugggested  by  their  com- 
mittee was  far  preferable,  as  they  would  keep  the  management 
of  their  affairs  in  their  own  hands. 

Probably  in  part  as  a  response  to  public  discussion  and 
criticism,  the  Minister  of  Reconstruction  and  the  Minister 
of  Labour  issued  a  joint  memorandum  ^  in  June,  1918, 
which  admitted  "in  the  light  of  experience"  the  necessity 
for  certain  modifications  of  the  proposals  of  the  second 
Whitley  Report.  The  special  type  of  Council  for  Group 
B  industries  was  abandoned,  and  no  Government  officials 
were  to  be  attached,  "except  on  application  of  the  Indus- 
trial Council  itself."  Trade  Boards  and  Industrial 
Councils  were  to  be  kept  entirely  distinct. 

^  Great  Britain.  Ministry  of  Reconstruction.  Industrial  Councils  and  Trade 
Boards.  Memorandum  by  the  Minister  of  Reconstruction  and  the  Minister  of 
Labour,  p.  4.     London,  1918. 

249 


Discussion^  at  the  Trades  Union  Congress  in  1917  also 
indicated  fear  of  too  much  Government  intervention, 
perhaps  leading  up  to  a  scheme  of  compulsory  arbitration. 
Opposition  came,  on  the  whole,  from  speakers  in  those 
unions  which  already  had  a  secure  position  and  permanent 
arrangements  for  dealing  with  employers.  It  was  also 
claimed  that  fuller  control  of  industry  should  be  given 
to  labor. 

§  7.     Fear  of  Governmental  Interference 

One  cause  of  opposition  to  the  Whitley  program 
was  the  fear  of  governmental  interference.  This  fear 
was  expressed  to  our  Commission  in  many  ways. 

The  National  Alliance  of  Employers  and  Employed, 
which  owes  its  inception  in  large  part  to  thj  Federation 
of  British  Industries,  urged  that  governmental  oversight 
should  be  reduced  to  a  minimum.  The  following  extract 
from  an  article^  appearing  in  its  official  organ.  Industrial 
Unity,  in  September,  191S,  indicates  the  general  line  of 
objections  offered  by  the  Alliance: 

One  of  the  temporary  stumbling  blocks  to  the  adoption  of 
the  Whitley  Scheme  was  the  strenuous  advocacy  by  the 
Government.  Then,  too,  at  the  beginning,  there  was  much 
talk  of  the  whole  scheme  being  permanently  under  the  patron- 
age of  the  Ministry  of  Labour.  There  were  references  to 
liaison  officers,  of  special  departments,  of  new  permanent 
officials,  of  records,  etc.,  and  trade  unions  who  have  long  since 
become  tired  of  the  Registrar-General  and  a  host  of  other 
bureaucratic  busybodies,  do  not  wish  to  become  connected 
with  any  more  Government  Departments.  The  National 
Alliance  of  Employers  and  Employed  criticized  this  side  of  the 
advocacy  of  the  Whitley  Committees,  and  largely  because  of 
its  criticism  that  point  of  view  has  been  modified  and  even 
repudiated  by  responsible  ministers. 

It  had  been  the  intent  of  those  presenting  the  plan  that 
the  employer  would  take  the  initiative  in  creating  Whitley 
Councils.  This,  however,  was  in  fact  not  done.  Con- 
sequently, it  was  said  that  some  directing  and  stimulating 
hand  from  the  Department  of  Labour  was  proving  to  be 
desirable.  It  was  this  intervention  that  caused  more  or 
less  antagonism. 

'  Trades  Union  Congress.    49tli  Annual  Report,  1917,  pp.  22G-35. 
2  Industrial  Unity.    Periodical  Report  of  the  National  Alliance  of  Employers 
and  Employed.     London,  September,  1918.    Vol.  I,  No.  5,  p.  33. 

250 


An    official    of    a    large    manufacturing    establishment 
visited  by  your  Commission  said: 

This  company  objects  to  the  Whitley  plan  because  of  the 
introduction  of  politicians.  The  company  believes  that  the 
masters  and  men  can  get  together  and  handle  their  differences 
better  without  calling  in  any  politicians.  This  Whitley  Plan 
is  considered  a  most  dangerous  experiment.  Shop  Com- 
mittees, also,  should  be  avoided  whenever  possible.  The 
anarchistic  element  will  always  lead  because  the  sane  men  keep 
quiet. 

A  leading  employer  in  the  printing  trades  reported  to 
us  as  follows: 

His  opinion  was  that  the  Ministry  of  Labour,  for  the 
Government,  was  trying  to  induce  the  employers  to  aid  in  and 
accept  the  organization  of  the  workmen  in  trade  unions.  That 
is,  when  the  Government  was  called  in  to  treat  disputes, 
obviously  they  found  it  of  advantage  to  act  with  organizations 
both  of  laborers  and  of  employers.  From  the  political  point 
of  view  there  was  a  strong  tendency  to  urge  employers  to 
assist  in  the  organization  of  employees.  He  thought  this 
unfortunate,  because  in  dealing  with  their  own  employees  they 
had  been  able  to  get  on  with  them  better  than  working  through 
larger  organizations.  He  thought  the  schemes  proposed  by  the 
Government  and  in  the  Whitley  Program  likely  to  be 
disadvantageous.  The  men  who  formed  the  Works  Com- 
mittees were  the  extremists  who  tried  to  get  possession  of  the 
machinery  of  the  unions  and  had  very  radical  aims  in  view. 
He  therefore  felt  strongly  that  the  employers  must  organize 
to  resist  this  tendency. 

The  manager  of  a  great  shipbuilding  plant  said  that 

he  was  not  at  all  favorable  to  the  Whitley  Plan,  owing  to  the 
fact  that  it  provides  for  a  central  national  organization  in 
which  the  political  influence  is  certain  to  be  strong. 

Also,  the  head  of  a  large  Birmingham  establishment 
said   to  us: 

I  am  not  in  favor  of  the  Whitley  Plan,  as  it  introduces 
politicians  into  the  regulation  of  labor  matters. 

Mr.  W.  A.  Appleton,  of  the  General  Federation  of  Trade 
Unions,  expressed  himself  thus: 

He  would  keep  the  politicians  off.  The  workers  and  em- 
ployers should  first  take  up  matters  with  committees  of  their 
own  people.     If  necessary,  they  may  themselves  agree  on  a 

251 


chairman  who  is  an  outsider,  but  this  chairman  should  not 
be  nominated  by  the  poHticians.  Likewise,  if  operating  as  a 
local  organization,  the  chairman  should  be  selected  by  the 
local  organization  and  not  by  the  National  Government. 
Also,  in  case  of  national  organizations,  the  matter  should  be 
settled  without  the  interference  of  Government  if  possible. 

As  bearing  on  the  delicate  question  of  the  organization 
of  Government  employees,  the  British  experience  shows 
how  easily  the  political  views  spread  throughout  the  whole 
system.  In  the  Trades  Union  Congress  (September, 
1918),  the  following  resolution  was  introduced: 

That  this  Congress  call  upon  the  Government  to  apply  the 
principles  of  the  Whitley  Report  to  all  departments  of  state 
service. 

A  member  of  the  Postal  Engineers,  in  seconding  the 
motion,  remarked  that 

What  is  good  enough  for  the  Government  to  preach  to  the 
employers  is  good  enough  to  be  applied  in  their  own  depart- 
ments. 

On  the  20th  of  February,  1919,  a  preliminary  confer- 
ence^ was  held  between  members  of  trade  unions  having 
members  in  Government  employ  and  Government  officials, 
at  which  the  Minister  of  Labour  stated  that: 

The  Government  is  whole-heartedly  supporting  that  [the 
Whitley]  principle,  and  that  we  agree  that  it  shall  be  carried 
out  in  the  most  complete  fashion  in  all  the  shops  and  yards 
for  which  the  Government  is  responsible. 

The  conference  accepted  a  draft  scheme  for  Whitley 
Councils  which  had  already  been  approved  by  the  War 
Cabinet  and  appointed  a  provisional  committee  of  trade 
unionists  and  representatives  of  Government  departments 
for  setting  up  the  Councils.  It  also  recommended  pro- 
vision for  reference  to  arbitration  by  a  Standing  Arbi- 
tration Council  in  any  cases  in  which  the  Treasury  or 
the  employing  departments  are  not  prepared  to  approve 
and  adopt  a  recommendation  of  the  Joint  Council.  The 
Provisional  Committee  has  now  drawn  up  draft  consti- 
tutions'-^ for  Departmental  Joint  Councils,  Trade  Joint 
Councils,  for  (a)  Shops,  (b)  Departments,  (c)  Works  or 
Yard,  and  (d)  Trade  Committees  in  local  establishments 
under  Government  departments. 

'C}rcat  I'^ritain:  Labour  Cazeltc,  March,  1911I,  pp.  Sl-82. 
*  Great  Britain:  Labour  Gazette  Supplement,  June,  1919. 

252 


The  movement  for  joint  councils  has  also  spread  to 
municipalities  in  England,  since  it  is  reported^  plans 
for  a  National  Council  for  employees  of  local  authorities 
have  been  drawn  up  by  a  committee  from  the  large 
municipal  associations  on  the  one  hand  and  representatives 
of  twelve  large  trade  unions  on  the  other.  The  Bradford 
City  Council  has  already  organized  a  joint  consultative 
board  of  the  corporation  and  its  employees,  consisting 
of  thirty-two  members,  one  half  representing  the  corpora- 
tion, the  other  half  the  respective  groups  of  employees. 
Other  municipalities  are  considering  the  formation  of 
similar  local   boards. 

§  8.     Government  Aid  in  Setting  Up  Whitley 
Councils 

With  some  general  reluctance  on  the  part  of  the  workers, 
combined  with  a  fear  of  outside  interference  on  the  part 
of  employers,  the  formation  of  Whitley  Councils  has  not 
met  expectations.  And  yet  very  active  help  has  been 
given  by  the  Ministry  of  Labour.  The  Ministry  of 
Labour  has  a  staff  of  men  trained  in  economics,  skilled 
in  British  industrial  history  and  in  knowledge  of  industrial 
problems.  On  request  one  of  these  men  is  sent  to  any 
group  of  employers  or  trade  unionists  to  explain  the 
scheme  and  to  give  any  assistance  required  in  setting  up 
the  machinery.  Explanatory  pamphlets  have  also  been 
issued,  one  of  which  has  reached  a  total  issue  of  200,000. 

By  the  middle  of  June,  1918,  two  industries  (pottery 
and  building  trades)  had  completed  the  organization  of 
Whitley  Councils  and  held  their  first  meeting  and  another 
(heavy  chemicals)  had  approved  its  draft  constitution. 
A  draft  constitution  had  been  formulated  by  11  trades 
(baking,  cable-making,  carting,  electrical  contracting, 
furniture,  gold,  silver,  and  jewelry,  leather  goods  and 
belting,  printing,  rubber,  silk,  vehicle  building).  In  three 
other  trades  (boot  and  shoe,  tramways,  woolen  and 
worsted)  a  provisional  committee  had  been  appointed 
and  a  conference  held  to  consider  the  proposition.  A 
statement  in  the  Lojidon  Times  at  the  close  of  1918  showed 
that  councils  had  been  set  up  in  19  different  trades,  and 
were  being  arranged  in  14  others.  In  some  27  other 
trades  what  are  called  interim  industrial  reconstruction 
committees  were  in  existence. 

1  U.  S.  Monthly  Labor  Review,  April,  1919,  pp.  157-58. 

253 


The  earliest  counciP  set  up  was  that  In  the  pottery 
industry,  which  held  its  first  meeting,  January  11,  1918. 
The  objects  of  the  council  were  stated  to  be  "the  advance- 
ment of  the  pottery  industry  and  of  all  connected  with  it 
by  the  association  in  its  government  of  all  engaged  in  the 
industry."  The  questions  on  which  the  Council  could 
take  action  were  similar  to  those  outlined  in  the  Whitley 
Report.  They  differ  only  in  being  more  concrete,  and 
therefore  of  more  significance.  Among  them  are  to  be 
found  such  topics  as  regular  consideration  of  wages, 
piecework  prices  and  conditions,  with  a  view  to  estab- 
lishing and  maintaining  equitable  conditions  throughout 
the  industry;  to  assist  maintenance  of  such  selling  prices 
as  will  afford  reasonable  remuneration  to  both  employers 
and  employed;  the  regularization  of  production  and 
employment  as  a  means  of  insuring  to  the  workpeople 
the  greatest  possible  security  of  earnings  and 

the  collection  of  full  statistics  on  wages,  making  and  selling 
prices,  and  average  percentages  of  profits  on  turnover,  and 
on  materials,  markets,  costs,  etc.,  and  the  study  and  promo- 
tion of  scientific  and  practical  systems  of  costing  to  this  end. 
All  statistics  shall,  where  necessary,  be  verified  by  chartered 
accountants,  who  shall  make  a  statutory  declaration  to  secrecy 
prior  to  any  investigation,  and  no  particulars  of  individual 
firms  or  operatives  shall  be  disclosed  to  any  one. 

The  membership  of  the  Council  consists  of  30  manu- 
facturers' representatives,  including  salaried  managers, 
appointed  by  manufacturers'  ^associations,  and  30  work- 
people, including  several  women  nominated  by  the 
trade  unions. 

At  the  National  Industrial  Conference  in  February, 
1919,  the  Minister  of  Labour  reported^  that 

through  the  mechanism  of  the  Ministry  of  Labour  26  Indus- 
trial Councils  have  come  into  existence  and  24  more  are  on  the 
way.    These  will  cover  2J^  millions  of  workmen. 

In  June,  1919,  National  Joint  Industrial  Councils 
had  been  established'*  in  33  industries: 

asbestos  manufacture;  bread  baking  and  flour  confectionery; 
metallic  bedsteads;  bobbin  and  shuttle  making;  building; 
chemical  trade;    china  clay;    coir  mat  and  matting;    elastic 

'  Great  Britain,  Labour  Cazelte,  February,  191S. 

'  Great  Britain.  Report  of  tlie  National  Industrial  Conference,  February  27, 
1919,  p.  11.     London,  1919. 

'  Glcndcnning,  J.:  " 'I'lie  VVliitley  Councils,"  Fortnightly  Review,  June,  1919, 
pp.  958-64. 

254 


web,  cord,  braid,  and  smallwares  fabric;  electrical  contracting; 
electricity  supply;  furniture;  gas;  gold,  silver;  horological 
and  allied  trades;  hosiery;  hosiery  (Scottish  section); 
local  authorities;  non-trading  services  (manual  workers); 
made-up  leather  goods;  match  manufacture;  packing-case 
making;  paint,  color  and  varnish;  waterworks  undertakings; 
welch  plate  and  sheet  trades;  pottery;  road  transport;  rubber 
manufacture;  sawmilling;  silk;  tin-mining;  vehicle  building; 
wallpaper  making;  woolen  and  worsted;  woolen  and  worsted 
(Scottish  section). 

In  addition,  provisional  committees  had  been  appointed 
to  draft  constitutions  for  National  Joint  Industrial 
Councils  for  the  following  industries: 

boot  and  shoe  manufacture;  carpets;  flour  milling;  musical 
instruments;  needles  and  fishhooks;  newspapers;  printing; 
roller  engraving;  shipping;  surgical  instruments;  tramways; 
wire  drawing. 

At  last  reports  some  42  Councils  were  in  existence;  but, 
according  to  a  representative  of  British  Labor  speaking 
in  this  country,  only  three  or  four  are  really  active.  It 
has  been  claimed  that  the  Trade  Board  is  a  far  more 
effective  instrument  for  the  workers.^ 

A  significant  case,  showing  the  force  of  local  repre- 
sentation, was  found  by  the  Commission  in  the  milling 
trade.  The  employers'  federation  of  the  milling  trade 
had  adopted  the  Whitley  Scheme  in  its  relations  with 
workpeople.  Beginning  in  the  opposite  order  from  that 
recommended,  many  firms  have  set  up  Works  Committees, 
several  District  Councils  are  in  existence,  and  the  National 
Council  was  in  process  of  formation.  As  the  flour  millers 
were  not  sufficiently  organized  twelve  months  ago  to 
set  up  a  National  Council,  they  preferred  to  start  from  the 
bottom  up,  and  were  at  first  threatened  with  refusal  of 
recognition  by  the  Ministry  of  Labour.  In  1917  this 
association  was  reorganized  and  now  has  affiliated  with 
it  17  local  associations  in  the  United  Kingdom. 

Representatives  of  the  Ministry  of  Labour  informed 
the  Commission  that  one  of  the  greatest  perplexities 
in  the  application  of  the  Whitley  Program  was  the 
position  of  the  salaried  staff.  The  difficulty  was  to  place 
them  in  the  bl-partite  division  of  the  Councils  into 
employers  and  employed.  In  one  industry  the  clerks 
had  ranged  themselves  on  the  side  of  the  workers.     In 

^  Miss  Margaret  Bondfield.     Tremont  Temple,  Boston,  July  9,  1919. 

255 


the  pottery  trade  the  managers  who  had  been  given  a 
seat  on  the  committees  had  also  ranged  themselves  on  the 
workers'  side.  In  the  electrical  trade  great  difficulty 
had  been  experienced  with  the  electrical  power  engineers. 
These  men  formed  one  fifth  of  the  total  employees  in  the 
trade  and  were  pivotal  men.  The  industry  could  not 
continue  without  them  while  they  could,  and  had,  run 
the  power  stations  even  when  the  general  laborers  had 
struck.  A  similar  situation  had  arisen  with  the  manu- 
facturing chemists.  Employers  were  only  the  financiers 
in  this  industry;  the  laborers  were  mostly  unskilled; 
the  manufacturing  chemists  were  the  brains  of  the  in- 
dustry. In  these  two  latter  industries  the  question  of 
the  representation  of  the  salaried  staff  was  still  under 
discussion.  The  position  of  the  Ministry  of  Labour  was 
that  the  parties,  employers  and  employed,  must  settle 
this  matter  of  policy  between  them  without  governmental 
interference. 

§  9.    Ultimate  Aim  to  Give  Labor  a  Share  in  Control 

There  can  be  no  question  that  the  intent  of  the  Whitley 
Councils,  in  which  governmental  pressure  is  brought 
to  bear,  is  to  give  labor  a  larger  share  in  the  control  of 
industry  than  it  has  had  in  many  trades.  This  intent 
seems  to  be  more  than  that  indicated  by  Mr.  Whitley 
himself  at  a  summer  conference  of  Industrial  Councils 
at  Oxford,  when  he  was  reported  to  have  said: 

It  has  been  too  much  the  habit,  in  days  gone  by,  to  think 
that  the  interests  of  those  who  had  been  described  as  the 
workers  —  a  misdescription,  he  thought,  or  a  partial  descrip- 
tion —  in  industry  began  and  ended  with  the  number  of  hours 
they  worked  and  the  amount  of  wages  they  drew.  Every 
man  and  woman  engaged  in  an  industry  ought  to  have  some 
interest  in  that  industry  beyond  the  wages  or  salary  they  are 
entitled  to.  The  barrier  which  hitherto  in  most  instances 
had  sharply  defined  classes  had  no  proper  reason  for  existence 
any  longer.  It  is  possible,  both  in  the  individual  factory  and 
workshop  and  in  the  councils  of  industry  as  a  whole  as  part  of 
the  great  national  effort,  that  there  should  be  joint  working, 
constructive  co-operation  on  the  part  of  all  persons,  men  and 
women,  engaged  in  that  industry. 

Such  a  consummation  is  devoutly  to  be  wislicd;  but  it 
is  a  question  whether  the  means  actually  adopted  will 
accomplish  the  desired  end.  Among  the  questions  to  be 
dealt  with  by  the  councils  is  a  settlement  of  the  general 

250 


principles  governing  the  fixing  of  wages. ^  Certainly  these 
councils  deserve  to  be  immortalized  If  they  solve  what 
the  economic  world  has  been  struggling  with  for  genera- 
tions. 

The  means  to  the  end  In  this  scheme  Is  based  on  union- 
ism. At  the  Ministry  of  Labour  it  was  stated  that  trade 
unionism  was  recognized  as  the  starting  point  of  the 
organization  of  the  Whitley  Councils;  that  the  scheme 
was  a  constructive  step,  an  advance  from  the  defensive 
policy  alike  of  employers  and  trade  unions  to  one  of 
co-operation. 

That  the  scheme  Is  based  on  unionism  is  clear,  not  only 
from  the  governmental  pressure  to  secure  full  unionization, 
but  also  by  Its  executive  action.  It  has  no  place  for 
non-union  men;  It  refuses  governmental  care  to  un- 
organized labor. 

In  the  printers'  trade,  after  the  strike  of  1911  many  great 
printing  estabUshments  had  become  "open  shops."  When 
the  formation  of  a  Whitley  Council  was  suggested  it  became 
apparent  that  these  non-unionists  could  not  be  represented 
without  organization.  The  "open-shop"  employers  there- 
fore organized  an  "Alliance"  which  included  themselves  and 
their  employees,  had  it  registered  as  a  trade  union,  and  asked 
for  representation  on  the  Whitley  Council.  The  printing 
trades  unions  objected  to  this  "blackleg,"  and  the  Minister 
of  Labour  refused  to  recognize  it.  The  negotiations  were  long 
and  protracted,  since  the  Federation  of  Master  Printers  could 
exercise  no  compulsion  over  their  employer  members.  Event- 
ually, when  the  plan  of  the  Industrial  Council  was  drawn  up, 
its  members  were  to  be  employers,  who  were  members  of  the 
Federation  of  Master  Printers  or  employed  members  of  a 
federated  trade  union,  and  trade  unions.  There  was  added, 
with  obvious  reference  to  this  "Alliance,"  the  following 
restrictive  sentence:  "No  members  of  any  organization  not 
in  harmony  with  the  objects  of  both  Federations  shall  be  eligi- 
ble for  membership  of  the  Industrial  Council."^ 

The  Whitley  Program,  therefore,  becomes  one  of  the 
illustrations  of  the  operation  of  political  Influences 
Intervening  In  the  settlement  of  labor  questions.  It  Is 
a  far  cry  from  the  formation  of  simple  Works  Committees 
in  which  Individual  employers  and  their  workers  meet 
to  settle  disputes  of  a  local  and  immediate  character. 
The  invisible  hand  that  Adam  Smith  Immortalized  is 
now  no  longer  invisible. 

^  See  III  in  list  of  First  Whitley  Report.    Supra,  p.  241. 
2  The  Builder,  Vol.  134,  p.  80. 

257 


CHAPTER  XVII 
THE  NATIONAL  INDUSTRIAL  CONFERENCE 

§  1.     A  Political  Move 

An  Intervention  of  the  British  Government  In  In- 
dustrial matters  of  a  much  more  obvious  political 
character  appears  In  the  recent  creation  of  the  National 
Industrial  Conference.  The  critical  situation  produced 
by  the  Triple  Alliance  in  the  early  part  of  1919  and  the 
acute  fear  of  a  cessation  of  basic  Industries  led  to  a 
demand  for  governmental  action.  Here  was  presented 
a  case  where  economic  questions  were  approached  from 
the  political  point  of  view.  While  It  was  In  the  very 
nature  of  the  case  impossible  for  a  Government  to  furnish 
a  solution  of  the  fundamental  problem,  nevertheless 
an  attitude  of  the  public  mind  had  arisen  which  expected 
the  Impossible;  and  the  Government  was  forced  to 
"do  something." 

The  action  desired  was  to  call  a  joint  conference  of 
employers  and  workers.  The  Government  had  already 
been  urged  to  take  this  course  by  the  Executive  Com- 
mittee of  the  National  Alliance  of  Employers  and  Em- 
ployed as  early  as  September,  1918.  The  project  was, 
according  to  Unity,^ 

for  a  great  national  conference,  not  on  the  old  lines,  where 
the  representatives  of  Capital  and  Labor  met  separately 
(the  former  to  pass  pious  condemnations,  the  latter  to  pass 
pious  resolutions),  but  on  entirely  new  lines.  The  scheme 
aimed  at  securing  that  employers  and  trade  unionists  should 
deliberate  together  as  the  two  partners  in  industry,  and,  in 
conjunction  with  representatives  of  the  State,  produce  an 
agreed  and  practical  industrial  policy. 

The  Government  was  regarded  by  some  as  failing  to  re- 
spond to  expectations  and  was  blamed  for  inaction  and 
vacillation: 

Politicians  have  traded  concessions  to  Labour  for  Labour 
votes  whilst  denouncing  Labour  as  Bolshevism  to  placate  the 
Middle  Classes. 

»  March,  1919,  p.  2. 

258 


.  .  .  One  thing,  however,  is  quite  clear;  the  Government 
has  utterly  failed  to  provide  a  means  or  institute  a  policy 
which  shall  stem  the  drift  toward  revolt,  let  alone  bring 
industrial  peace. ^ 

The  National  Alliance  complained  that  the  Government 
did  not  even  trouble  to  consider  its  scheme  of  a  conference 
until  the  industrial  unrest  became  extremely  grave. 

On  the  other  hand,  the  point  was  raised  that  if  the 
Government  would  justify  its  primary  function  of  keeping 
order,  the  economic  questions,  quite  beyond  the  sphere 
of  political  action,  should  be  allowed  to  work  themselves 
out. 

Sir  Allan  Smith,  of  the  Engineering  and  Shipbuilding 
Employers'  Federation,  speaking  at  the  National  In- 
dustrial Conference  insisted  that^ 

the  whole  experience  of  the  past  twenty  years  has  proved 
that  if  the  Government  will  leave  us  alone,  we  are  far  better 
able  to  settle  our  troubles  than  we  should  be  under  the 
aegis  of  any  outsider. 

But  the  Government  seemingly  wanted  something  In 
addition  to  the  Whitley  Plan,  although  the  Minister  of 
Labour  during  his  opening  speech  explained  that  agree- 
ments between  employers  and  workmen  regarding  fixing 
of  hours  were  already  in  operation  covering  three  million 
of  workmen  and  that  negotiations  were  going  on  for 
trades  which  would  cover  two  million  more  (referring 
obviously  to  the  Whitley  Councils). 

This  situation  Induced  the  Government  to  take  some 
additional  action  for  a  general  consideration  of  the 
Industrial  problems  facing  the  nation.  On  February  18th^ 
the  Ministry  of  Labour  announced  that  a  National  In- 
dustrial Conference  would  be  held  to  confer  with  the 
Minister  of  Labour,  the  Prime  Minister,  and  other  repre- 
sentatives of  the  Government,  regarding  means  for 
allaying  industrial  unrest.  Invitations  to  send  repre- 
sentatives were  Issued  to  employers'  associations  and 
federations,  trade  unions  and  federations  of  trade  unions, 
joint  industrial  councils.  Interim  Industrial  reconstruction 
committees,   trade  boards,   and  certain  other  important 

^  The    Organizer,  February,  1919,  pp.  153-54. 

^  Great  Britain,  Report  of  the  National  Industrial  Conference,  February 
27,  1919,  London,  1919,  p.  19. 

'  Spectator,  February  22,  1919,  p.  218.  Great  Britain,  Labour  Gazette,  March, 
1919,  p.  78, 

259 


interested  committees,  such  as  the  Parliamentary  Com- 
mittee of  the  Trade  Union  Congress,  the  Parliamentary 
Committee  of  the  Scottish  Trades  Union  Congress,  the 
Federation  of  British  Industries,  the  National  Alliance 
of  Employers  and  Employed.  When  the  Congress 
convened  on  February  27th,  about  300  representatives 
of  employers  and  500  representatives  of  workpeople 
were  present. 


§  2.     Attitude  of  Government  at  Conference 

It  was  the  purpose  of  the  Government  representa- 
tives in  conducting  the  Conference  to  put  the  leading 
problems  before  the  delegates  and  give  the  opportunity 
for  free  discussion  before  any  action  was  taken.  With 
this  object  in  view  the  Minister  of  Labour  as  Chairman 
opened  the  Conference  by  pointing  out  that  the  in- 
consistent demands  of  the  various  unions  had  resulted 
in  disputes,  the  continuance  of  which  would  endanger 
the  very  existence  of  the  country.  For  this  reason, 
he  said, 

it  was  decided  to  invite  this  large  and  responsible  assembly 
to  come  here  for  the  purpose  of  giving  to  the  Government  the 
best  of  their  advice  and  assistance. 

After  this  introduction  he  reviewed  the  main  phases 
of  the  labor  problem,  touching  upon  unemployment, 
hours  of  labor,  wages,  housing,  cost  of  food,  strikes,  and 
the  redemption  of  war  pledges.  Outlining  the  general 
position  of  the  Government  in  these  matters,  he  again 
appealed  to  the  Conference  for  assistance  in  the  solution 
of  these  internal  difficulties. 

Immediately  upon  the  close  of  this  appeal  for  co-opera- 
tion, a  discordant  note  was  struck  by  the  representative 
of  the  Amalgamated  Society  of  Engineers,  who  character- 
ized the  Conference  as  "somewhat  similar  to  that  which 
met  in  May  of  1789,  at  Versailles,  when  representatives 
of  the  various  departments  of  France  listened  to  a  very 
important  speech  from  the  Crown."  From  this  beginning 
one  trade  union  speaker  after  another  went  on  with 
criticisms  of  the  Government  and  recriminations  against 
the  employing  class,  in  fact,  Mr.  J.  H.  Thomas,  of  the 
Railwaymcn,     practically     juit     an     ultimatum     for     the 

:^00 


Triple  Alliance  before  the   Conference  in   the  following 
words : 

The  workers,  and  I  speak  more  especially  for  the  members 
of  our  threefold  organization,  are  determined  to  shorten 
materially  the  hours  of  labor  in  their  respective  industries. 
They  are  dissatisfied  with  the  system  of  society  which  treats 
their  labor  power  as  a  mere  commodity  to  be  bought,  sold, 
and  used  as  though  they  were  machine-like  units  in  the  process 
of  wealth  production,  and  they  therefore  demand  that  they 
shall  become  real  partners  in  industry,  jointly  sharing  in  the 
determination  of  working  conditions  and  of  management. 
Labor  becomes  increasingly  alive  to  its  sovereign  power,  and 
will  shirk  no  responsibility,  but  equally  it  will  be  denied  none 
of  its  rights  and  privileges.  The  Miners,  Railwaymen,  and 
Transport  Workers  stand  unalterably  for  ownership  by  the 
State  of  the  mines,  railways,  and  the  means  of  inland  and 
coastal  transport. 

So  far  there  had  been  no  speaker  for  the  employers. 
In  response  to  a  suggestion  that  employers  should  be 
heard  from,  Sir  Allan  Smith,  of  the  Engineering  and  Ship- 
building Employers'  Association,  rose  to  plead  for  modera- 
tion and  a  reasonable  discussion,  instead  of  the  recrimina- 
tion and  vague  statements  of  aspiration  that  had  been 
heard  from  the  labor  spokesmen.  He  also  suggested  a 
resolution  that 

an  Industrial  Committee  consisting  of  twenty  representatives 
of  the  employers,  twenty  representatives  of  the  unions,  and 
(whatever  number  is  decided  to  be  wise)  representatives  of  the 
Government  Departments,  under  the  presidency  of  the 
Minister  of  Labour,  be  appointed  to  consider  and  report  to  a 
further  meeting  of  this  Conference,  on  the  causes  of  the 
present  unrest  and  the  steps  to  safeguard  and  promote  the 
best  interests  of  the  employers,  the  workpeople,  and  the 
State,  and,  second,  that,  in  view  of  the  urgency  of  the  situa- 
tion, it  be  a  direction  to  the  committee  to  present  an  Interim 
Report  or  Interim  Reports  as  soon  as  it  is  in  a  position  to 
do  so.^ 

From  this  time  on  the  Conference  assumed  a  more 
reasonable  tone.  A  disposition  to  put  aside  differences 
and  to  co-operate  in  seeking  a  satisfactory  solution  was 
manifested.  Mr.  J.  R.  Clynes  stated  that  his  chief 
concern  was  lest  Labor  ask  too  much  at  one  time  for  its 
own  good,   and   said   that  so  far  as   he  understood   the 

^  National  Industrial  Conference,  February  27,  1919,  p.  21. 

261 


resolution  of  Sir  Allan  Smith,  he  endorsed  it.  Mr.  Arthur 
Henderson  agreed  that  since  the  present  problems  were 
not  merely  temporary  in  character,  the  resolutions  for 
a  permanent  Industrial  Council,  with  thirty  representa- 
tives of  each  side,  should  be  passed,  and  that  the  subjects 
for  investigation  should  be  wages,  hours  of  labor,  in- 
dustrial relations,  and  unemployment. 

At  the  close  of  the  discussion  the  Prime  Minister 
answered  some  of  the  objections  raised  by  various  speakers 
and  pointed  out  that  the  first  condition  for  renewed 
prosperity  was  the  restoration  of  confidence.  He  appealed 
to  all  parties  to  co-operate  for  this  purpose  and  suggested 
for  adoption  a  revision  of  resolutions  already  offered  by 
Sir  Allan  Smith  and  Mr.  Arthur  Henderson.  In  its 
revised  form  the  resolution  adopted  by  the  Conference 
was  as  follows: 

That  this  Conference,  being  of  the  opinion  that  any  pre- 
ventable dislocation  of  industry  is  always  to  be  deplored,  and, 
in  the  present  critical  period  of  reconstruction,  might  be  dis- 
astrous to  the  nation,  and  thinking  that  every  effort  should 
be  made  to  remove  legitimate  grievances  and  promote 
harmony  and  good  will,  resolves  to  appoint  a  Joint  Committee, 
consisting  of  equal  numbers  of  employers  and  workers,  men 
and  women,  together  with  a  chairman  appointed  by  the 
Government,  to  consider  and  report  to  a  further  meeting  of 
this  Conference  on  the  causes  of  the  present  unrest  and  the 
steps  necessary  to  safeguard  and  promote  the  best  interests  of 
employers,  workpeople,  and  the  State,  and  especially  to  con- 
sider, and  report  to  a  further  meeting  of  this  Conference  on 
the  causes  of  the  present  unrest  and  the  steps  necessary  to 
safeguard  and  promote  the  best  interests  of  employers,  work- 
people, and  the  State,  and  especially  to  consider: 

(1)  Questions  relating  to  Hours,  Wages,  and  General  Condi- 
tions of  Employment. 

(2)  Unemployment  and  its  prevention. 

(3)  The   best   methods   of  promoting  co-operation   between 
Capital   and   Labor. 

The  Joint  Committee  is  empowered  to  appoint  such 
sub-committees  as  may  be  considered  necessary,  consisting 
of  equal  numbers  of  employers  and  workers,  the  Government 
to  be  invited  to  ncjminatc  a  representative  for  each. 

In  view  of  the  urgency  ol  Uic  i]ucstion  the  Joint  Committee 
is  empowered  to  arrange  with  the  Government  for  the  re- 
assembling of  the  National  Conference  not  later  than  April 
r)th  for  the  purpose  of  considering  the  report  of  the  Joint 
Committee. 

2G2 


It  is  worth  noting  that  opposition  to  the  passage 
of  such  a  resolution  came  from  two  sources.  Some 
delegates  objected  that  they  had  no  mandates  from  their 
organizations  to  take  action.  Another  small  group 
claimed  that  the  Conference  in  spite  of  its  majority  of 
workers'  delegates  could  not  be  regarded  as  an  accredited 
delegate  conference  of  the  labor  movement.  It  was 
asserted  that  some  members  represented  only  compara- 
tively few  dozen  people  on  an  industrial  council.  In 
spite  of  the  refusal  of  the  Triple  Alliance  and  the  Amalga- 
mated Society  of  Engineers  to  be  a  party  to  the  resolution, 
however,  it  was  passed  by  a  majority  of  those  present. 

At  separate  meetings  of  the  delegates  thirty  members 
of  the  Joint  Committee  were  chosen  for  each  side,  two 
women  being  included  among  the  representatives  of 
workpeople.  As  independent  chairman  the  Government 
appointed  Sir  Thomas  Munro;  Sir  Allan  Smith  was 
elected  chairman  for  the  employers  and  Mr.  Arthur 
Henderson  for  the  workers.  At  the  first  meeting  of  the 
Joint  Committee,  March  4th,  the  work  was  divided 
among  three  subcommittees,  with  the  following  terms 
of  reference: 

"(1)    To  make  recommendations  concerning: 

(a)  The  metliods  of  negotiation  between  employers 
and  trade  unions,  including  the  establishment  of  a  per- 
manent Industrial  Council  to  advise  the  Government  on 
industrial  and  economic  questions  with  a  view  to  maintain- 
ing industrial  peace. 

(b)  The  method  of  dealing  with  war  advances,  and 

(c)  The  methods  of  requesting  wages  for  all  classes  of  work- 
ers, male  and  female,  by  legal  enactment  or  otherwise. 

"  (2)  To  make  recommendations  as  to  the  desirability  of 
legislation  for  a  maximum  number  of  working  hours  and  a 
minimum  rate  of  wages  per  week. 

"  (3)  To  consider  the  question  of  unemployment,  and  to  make 
recommendations  for  the  steps  to  be  taken  for  its  prevention, 
and  for  the  maintenance  of  the  unemployed  in  those  cases 
in  which  it  is  not  prevented,  both  during  the  present  emer- 
gency period  and  on  a  permanent  basis."  ^ 

^  Report  of  Provisional  Joint  Committee,  p.  3. 

263 


§  3.     Report  of  Provisional  Joint  Committee 

The  full  report^  of  the  Joint  Committee  was  pre- 
sented to  the  members  of  the  National  Conference  some 
days  before  its  reassembly  on  April  4th.  In  submitting 
its  recommendations  the  Joint  Committee  stated  that  it 
had  been  impossible 

to  attempt  any  exhaustive  investigation  into  every  aspect 
of  unrest,  to  examine  fully  the  relation  between  under- 
consumption and  unemployment,  between  wage  standards 
and  purchasing  power,  the  relationship  of  production  to  the 
whole  economic  and  industrial  situation,  and  many  other 
fundamental  but  complicated  matters  of  discussion. 

Hence  it  advised  the  establishment  of  a  permanent 
National  Industrial  Council  for  investigation  and  con- 
tinuous review  of  such  questions. 

It  also  put  itself  on  record  as  favoring  the  steps  being 
taken  in  favor  of  international  regulation  of  labor  condi- 
tions. 

The  following  definite  conclusions  were  drawn  by  the 
Joint  Committee: 

Hours. 

(a)  The  establishment  by  legal  enactment  of  the  principle 

of    a  maximum  normal   working   week   of    forty-eight 
hours,  subject  to . 

(b)  Provision  for  varying  the  normal  hours  in  proper  cases, 

with  adequate  safeguards. 

(c)  Hours  agreements  between  employers  and  trade  unions 

to  be  capable  of  application  to  the  trade  concerned. 

(d)  Systematic  overtime  to  be  discouraged,  and  unavoidable 

overtime  to  be  paid  for  at  special  rates. 

Wages. 

(a)  The    establishment    by    legal    enactment    of    minimum 

time-rates  of  wages,  to  be  of  universal  applicability. 

(b)  A  Commission  to  report  within  three  months  as  to  what 

these  minimum  rates  should  be. 

(c)  Extension  of  the  establishment  of  Trade  Boards  for  less 

organized  trades. 

'  Great  Britain.  Industrial  Conference.  Report  of  Provisional  Joint 
Committee  for  Presentation  to  Further  Meeting  of  Industrial  Conference, 
April  4,  1919.    London,  1919.     XXVIII,  p.  14. 

264 


(cf)  Minimum  time-rates  agreements  between  employers  and 
trade  unions  to  be  capable  of  application  to  all  em- 
ployers engaged  in  the  trade  falling  within  the  scope  of 
the  agreement. 

(e)  Wages  (Temporary  Regulation)  Acts,  1918,  to  continue 
for  a  further  period  of  six  months  from  21st  May,  1919. 

(/)  Trade  Conferences  to  be  held  to  consider  how  war 
advances  and  bonuses  should  be  dealt  with,  and,  in 
particular,  whether  they  should  be  added  to  the  time- 
rates  or  piecework  prices,  or  should  be  treated  sepa- 
rately as  advances  given  on  account  of  the  conditions 
due  to  the  war. 

Recognition  of,  and    negotiations    between,  organizations  of 
employers  and  workpeople. 

(a)  Basis  of  negotiation  between  employers  and  workpeople 

should  be  full  and  frank  acceptance  of  employers'  organi- 
zations and  trade  unions  as  the  recognized  organizations 
to  speak  and  act  on  behalf  of  their  members. 

(b)  Members  should  accept  the  jurisdiction  of  their  respec- 

tive organizations. 

(c)  Employers'  organizations  and  trade  unions  should  enter 

into  negotiations  for  the  establishment  of  machinery, 
or  the  revision  of  existing  machinery,  for  the  avoidance 
of  disputes,  with  provision  for  a  representative  method 
of  negotiation  in  questions  in  which  the  same  class  of 
employers  or  workpeople  are  represented  by  more  than 
one  organization  respectively,  and  for  the  protection 
of  employers'  interests  where  members  of  trade  unions 
of  workpeople  are  engaged  in  positions  of  trust  or 
confidentiality,  provided  the  right  of  such  employees 
to  join  or  remain  members  of  any  trade  union  is  not 
thereby  affected. 

Unemployment. 

(1)    Prevention  of  Unemployment. 

(a)  Organized  short  time  has  considerable  value  in  periods 
of  depression.  The  joint  representative  bodies  in  each 
trade  afford  convenient  machinery  for  controlling  and 
regulating  short  time. 

{b)  Government  orders  should  be  regulated  with  a  view  to 
stabilizing  employment. 

(c)  Government  housing  schemes  should  be  pressed  forward 
without  delay. 

{d)   Demand  for  labor  could  be  increased  by  State  develop- 
ment of  new  industries. 
265 


(2)    Maintenance  of  Unemployed  Workpeople. 
(e)    Normal  provision  for  maintenacne  during  unemployment 

should  be  more  adequate  and  of  wider  application,  and 

should  be  extended  to  under-employment. 
(/)   Unemployed    persons,    and    particularly   young   persons, 

should    have    free    opportunities    of    continuing    their 

education, 
(g)   The  employment  of  married  women  and  widows  who  have 

young  children  should  be  subject  of  a  special  inquiry. 
(h)  The  age  at  which  a  child  should  enter  employment  should 

be  raised  beyond  the  present  limit, 
(i)    Sickness  and   Infirmity  Benefits    and   Old  Age   Pensions 

require  immediate  investigation  with  a  view  to  more 

generous   provisions  being  made. 

National  Industrial  Council. 

(a)  A  permanent  National  Industrial  Council  should  be  es- 

tablished to  consider  and  advise  the  Government  on 
national  industrial  questions. 

(b)  It  should  consist  of  400  members,  200  elected  by  em- 

ployers' organizations  and  200  by  trade  unions. 

(c)  The  Minister  of  Labour  should  be  President  of  the  Council. 

(d)  There  should  be  a  Standing  Committee  of  the  Council 

numbering  50  members  and  consisting  of  25  members 
elected  by  and  from  the  employers'  representatives, 
and  25  by  and  from  the  trade  union  representatives, 
on  the  Council. 

The  employers  on  the  Joint  Committee  found  it 
impossible  to  complete  a  statement  on  production  which 
they  had  intended  to  submit  with  the  report.  The 
trade  unionists,  however,  did  offer  a  provisional  scheme 
for  trade  union  representation  on  the  National  Industrial 
Council  and  an  extended  memorandum,  apparently 
without  any  official  status,  on  the  causes  of  and  remedies 
for  industrial  unrest,  both  of  which  were  included  as 
appendices  to  the  report  "by  their  express  wish  that  it 
shall  be  published  in  this  report."  They  were  inclined 
to  hold  the  Government  responsible  for  a  considerable 
share  of  the  labor  unrest.     For  instance: 

Not  only  social  theorists,  but  also  the  most  prominent 
spokesmen  of  the  Government  have  constantly  told  the 
workers  that  we  should  never  revert  to  the  old  conditions 
of  industry  and  that  an  altogether  higher  standard  of  life 
and  an  altogether  superior  status  for  the  worker  in  industry 

266 


would  be  secured  as  soon  as  the  immediate  burden  of  hostilities 
was  removed.  The  Prime  Minister  himself  has  urged  an 
official  deputation  from  the  Labour  Party  to  be  audacious,  and 
the  promises  of  drastic  industrial  change  made  by  the  Govern- 
ment are  too  numerous  to  chronicle The  lack  of  any 

comprehensive  industrial  or  economic  policy  on  the  part  of 
the  Government  or  the  employers  must  therefore  be  regarded 
as  one  of  the  principal  factors  in  the  present  labor  unrest. 

While  specific  remedies,  some  of  which  coincided  with 
the  proposals  of  the  Joint  Committee,  were  suggested 
for  particular  difficulties  the  memorandum  held  that  the 
real  cause  of  unrest  was  the  conviction  of  the  working 
class  that  production  for  private  profit  must  be  largely 
superseded  by  public  ownership  and  democratic  control 
of  industry.  The  latter  demand,  it  was  asserted,  the 
Whitley  Scheme  had  done  little  or  nothing  to  satisfy. 

§  4.     Report  Accepted   by  National  Industrial 
Conference 

At  the  renewed  session^  of  the  Conference  on  April 
4th,  after  full  joint  and  separate  discussion  of  the  com- 
mittee's proposals  by  the  two  sections  of  the  Confer- 
ence, Mr.  Arthur  Henderson's  motion  was  carried,  that 
the  report  be  submitted  for  acceptance  to  the  various 
constituent  organizations  as  soon  as  the  Government 
had  officially  declared  its  readiness  to  carry  Its  recom- 
mendations into  effect. 

In  the  absence  of  the  Prime  Minister,  the  Minister  of 
Labour  did  not  commit  the  Government  to  all  details 
of  the  report,  but  said  he  believed  Its  principles  would 
be  approved.  He  pointed  out  that  the  proposals  regarding 
industrial  negotiations,  allocation  of  government  con- 
tracts, development  of  industries,  housing  construction, 
Trade  Boards,  the  revision  of  old  age  pensions,  and  the 
continuation  of  the  Wages  (Temporary  Regulation) 
Act  were  already  being  carried  out  by  the  Government. 

§  5.     Meeting  of  the  Joint  Committee  May  1st 

On  May  1st,  at  a  meeting  of  the  Provisional  Joint 
Committee  the  Intentions  of  the  Government  were 
further  defined  by  a  letter  from  the  Prime  Minister," 
which  was  read  by  the  Minister  of  Labour,  part  of  which 
was  as  follows: 

^  Great  Britain.    Labour  Gazette,  April,  1919,  pp.  124-25. 

267 


Though  I  cannot  commit  myself  to  every  detail,  as  many 
of  them  are  complex  and  technical,  I  may  say  at  once  that  I 
fully  accept  in  principle  your  recommendations  as  to  the 
fixing  of  maximum  hours  and  minimum  rates  of  wages.  As 
regards  hours,  a  bill  is  now  being  drafted  to  give  effect  to  your 
recommendations,  and  will,  I  hope,  be  introduced  at  a  very 
early  date.  I  think  you  will  find  that  it  fully  carries  out  the 
principles  set  forth  in  your  report,  though,  as  you  have  recog- 
nized, elasticity  must  be  provided  in  order  to  meet  the  special 
circumstances  of  particular  industries. 

There  are  certain  industries,  such  as  agriculture,  in  which 
seasonal  and  other  conditions  necessitate  special  consideration; 
and  some  cases,  such  as  those  of  seamen  and  domestic  ser- 
vants, in  which  it  would  be  impossible  to  enforce  a  week  of 
forty-eight  hours;  but  I  agree  that  the  act  should  otherwise 
apply  to  all  industries  in  which  a  legal  limitation  of  hours  is 
practicable,  and  that,  where  exceptions  are  necessary,  they 
should  be  applied  for  by  those  concerned  through  the  ma- 
chinery which  you  have  suggested  in  your  report. 

As  regards  wages,  I  accept  the  principle  that  minimum 
rates  of  wages  should  in  all  industries  be  made  applicable  by 
law.  The  question  of  the  best  method  of  doing  this,  however, 
is  complex  and  full  of  difficulties,  and  I  do  not  think  that  it 
would  be  possible  to  frame  legislation  until  a  scheme  for 
carrying  out  the  principle  of  minimum  rates  has  been  fully 
worked  out.  I  therefore  gladly  accept  your  suggestion  that 
the  Government  should,  in  the  first  place,  set  up  a  Commis- 
sion with  wide  terms  of  reference  to  report  on  the  whole 
matter.  As  regards  the  extension  of  the  Wages  (Temporary 
Regulation)  Act,  a  bill  has  been  prepared  for  this  purpose  and 
has  been  introduced. 

In  regard  to  unemployment,  I  understand  that  your  com- 
mittee was  unable  to  make  any  definite  recommendation  as  to 
how  the  present  provision  against  unemployment  should  be 
extended,  though  they  were  unanimous  in  thinking  extension 
necessary.  In  view  of  the  short  time  at  your  disposal,  I  do  not 
think  that  the  committee  could  be  blamed  for  this,  but  the 
question  of  unemployment  is  one  of  the  most  urgent  and  im- 
portant of  the  problems  confronting  us,  and  until  it  is  satis- 
factorily solved  I  do  not  feel  that  we  shall  have  really  effected 
one  of  the  most  vital  improvements  in  our  social  conditions. 
I  therefore  hope  that  this  is  the  first  question  to  which  the 
National  Industrial  Council  will  address  itself. 

I  cordially  welcome  your  proposal  to  set  up  a  National 
Council,  and  hope  that  you  will  take  steps  to  bring  it  into 
being  as  quickly  as  possible,  as  I  am  sure  that  it  will  be  of 
great  value  in  assisting  the  Government  to  improve  industrial 
conditions. 

268 


As  further  action  was  now  dependent  upon  the  legisla- 
tive enactment  of  recommendations  of  the  Joint  Com- 
mittee, it  was  resolved  to  adjourn  until  such  time  as 
decided  upon  by  the  chairman.  In  the  mean  time,  the 
various  constituent  bodies  would  consider  the  reply  of 
the  Government  and  their  attitude  thereon. 


§  6.     Criticism    of  Government   Procrastination  by 
National  Alliance 

Just  as  the  National  Alliance  of  Employers  and  Em- 
ployed had  deprecated  the  Government's  reluctance  to 
call  a  joint  conference,  it  now  condemned  the  delay  in 
putting  the  recommendations  into  effect.  In  an  editorial 
in  Unity'^  it  was  pointed  out  that  the  report 

was  signed  unanimously  by  the  most  representative  body  of 
trade  unionists  and  employers  ever  brought  together.  .  .  . 
It  was  an  instance  typically  British,  of  the  sane,  careful 
majority,  that  is  usually  passive  and  indifferent,  rousing 
itself  for  an  effort  of  social  reconstruction.  The  disruptive 
elements  in  society  on  both  sides  hate  this  movement.  The 
persons  who  make  up  these  elements  are  hoping  against  hope 
that  the  recommendations  will  not  be  embodied  in  legislative 
proposals. 

The  Government  was  accused  of  pursuing  a  very 
dangerous  hand-to-mouth  policy  and  the  lack  of  definite 
assurance  of  immediate  action  in  Mr.  Lloyd  George's 
letter  was  condemned.  Vague  suggestions,  hopes,  and 
sympathy  without  action  were  risking  the  stability  of 
society.  Only  legislation  embodying  the  recommenda- 
tions of  the  National  Industrial  Conference  could,  in 
the  opinion  of  the  National  Alliance,  avert  the  danger  of 
further  unrest  and  set  the  industrial  machinery  running. 
Further  delay  would  justify  the  accusations  of  radical 
groups  and  convince  organized  labor  that  only  drastic 
disturbances  could  secure  reforms. 

The  dissatisfaction  felt  among  employers  with  Govern- 
ment handling  of  industrial  matters  was  reflected  in  the 
reply-  of  one  of  the  largest  employers  of  labor,  himself 
resolutely  set  against  any  other  than  an  autocratic  solution 
of  industrial  administration.  When  asked  which  of  the 
two   alternatives,   state   government    or    joint-committee 

1  Unity,  June,  July,  1919,  p.  1. 

2  The  Organizer,  April,  1919,  p.  385. 

269 


government  of  industry  in  its  full  sense,  he  would  prefer 
if  he  were  forced  to  a  choice,  he  declared  unhesitatingly 
in  favor  of  the  latter,  as  immeasurably  less  likely  to 
result  in  stagnation  and  congestion.  In  the  same  number 
of  The  Organizer  which  reports  this  view  it  is  stated  as 
the  opinion  of  many  present  at  the  National  Industrial 
Conference  that  it  was  a 

not  very  hopeful  or  necessary  experiment,  too  vague  in  its 
terms  of  reference,  too  haphazard  and  incomplete  in  its  con- 
stitution, and  rather  open  to  the  charge  of  being  a  political 
device  to  gain  time. 

Another  view^  of  the  plan  for  a  permanent  National 
Industrial  Conference  was  taken  by  Mr.  E.  J.  P.  Benn, 
who  had  been  a  warm  advocate  of  the  Whitley  Councils. 
He  claimed  that  the  establishment  of  an  industrial 
parliament  on  a  basis  of  direct  representation  would  be 
a  Government  breach  of  faith  with  the  Whitley  Councils, 
since  it  had  been  promised  that  they  would  be  regarded 
as  the  normal  channels  of  communication  between  their 
industries  and  the  Government.  It  was  his  belief  that  the 
Government  was  by  this  means  making  a  furtive  attack 
on  the  Whitley  Councils,  which  it  wished  to  obstruct 
because  they  "do  not  provide  jobs  for  officials."  If  there 
was  to  be  a  National  Industrial  Conference,  the  delegates 
should  be  drawn  from  the  joint  industrial  councils. 

On  the  other  hand,  an  article  in  the  June  Fortnightly 
Review"^  claimed  that  the  National  Conference  will  give 
a  new  sanction  to  the  Whitley  Report  and  quicken  the 
establishment  of  joint  industrial  councils.  The  writer 
said  that  while  the  Conference  was  characterized  by 
plain  speaking  on  both  sides,  it  was  evident  that  both 
employers  and  workpeople  would  welcome  machinery 
which  would  bring  them  to  a  clearer  understanding. 

It  is  not  too  much  to  say  that  the  resumed  Conference, 
which  met  on  April  4th,  proved  that  the  necessary  kind  of 
machinery  had  been  devised. 

The  achievement  of  the  Conference  proved,  in  his 
opinion,  that 

'  Ways  and  Means,  April  5,  1919,  pp.  144—15. 

"Glendcnning,  James:  "The  Whitley  Councils."  Fortnightly  Review, 
June,  1019,  pp.  958-64. 

270 


the  vast  body  of  employers  and  workpeople  are  sincerely 
anxious  to  clear  away  avoidable  misunderstanding  and  to 
base  industry  now,  and  in  the  future,  upon  a  solid  foundation 
of  good  will  and  co-operation. 


§  7.     Conclusion 

It  will  be  seen  from  this  survey  that  the  National 
Industrial  Conference  was  a  "last  act"  by  the  British 
Government  to  avert  an  industrial  crisis.  There  was  a 
growing  volume  of  voices  demanding  the  Government  to 
"do  something,"  for  the  threats  of  the  belligerent  Triple 
Alliance  seemed  likely,  if  carried  out,  to  tie  up  all  industry. 
The  "something"  done  by  the  Government  was  this 
get-together  meeting  where  complainants  had  a  free 
chance  to  speak  their  minds.  What  permanent  results 
will  issue  from  it  cannot  now  be  surmised.  It  is  clear, 
however,  that  for  a  brief  breathing  space  the  Government 
averted  a  crisis;  the  Industrial  Conference  held  the 
center  of  the  stage  for  a  time,  fulfilled  the  demand  for 
doing  something.  Then  a  new  activity  diverted  public 
attention  to  the  Miners'  Federation  and  the  Coal  Com- 
mission. Such  widespread  publicity  for  the  demands  of 
organized  labor  has  at  least  one  beneficent  effect,  so  far 
as  the  Government  is  concerned:  it  enables  popular 
opinion  to  form  itself  sufficiently  for  the  officials  to  chart 
their  course.  The  real  solution  of  the  industrial  problems, 
however,  remains  as  before  with  the  workmen  and 
employers. 


271 


CHAPTER  XVIII 

POLITICAL  INFLUENCES  IN  FRENCH  LABOR 
MOVEMENT 

§  1.    The  General  Situation 

The  labor  situation  in  France  is  distinctly  different  from 
that  in  Great  Britain.  One  distinction  lies  in  the  amount 
of  the  labor  supply;  Great  Britain  has  a  surplus  of  labor, 
France  a  deficiency.  This  fact  modifies  the  entire  indus- 
trial aspect.  For  example,  there  is  not  found  in  France  the 
opposition  on  the  part  of  the  workingmen  to  the  intro- 
duction of  labor-saving  machinery  or  to  dilution,  especially 
the  introduction  of  women  workers,  as  in  England.  In 
addition,  there  is  a  sympathetic  attitude  toward  scientific 
management  among  French  workmen,  and,  in  contrast 
with  Great  Britain,  the  fundamental  working  principles 
of  organized  labor  in  France  show  a  decidedly  more  open 
spirit  of  co-operation.  The  Program  of  the  General 
Federation  of  Labor  {Confederation  Generale  du  Travail)^ 
the  most  powerful  labor  organization  in  France,  as  an- 
nounced by  its  Secretary,  M.  Leon  Jouhaux,  reads: 

"The  formula  for  the  working  class  should  be  —  a  maxi- 
mum production  in  the  minimum  working  time  for  a  maxi- 
mum of  wages. 

"For  the  employer  —  a  maximum  development  of  shop 
equipment  to  produce  a  maximum  output  with  a  minimum 
expense  of  production."^ 

The  difference  in  temperament  between  French  and 
British  workmen  is  also  significant.  The  French  can  be 
more  quickly  and  greatly  influenced  by  ideas  than  the 
British,  wlio  demand  facts.  The  idea  that  France  must 
be  defended,  even  though  Germany  was  stronger  and 
better  prepared,  explains  why  she  rose  to  the  occasion  so 
marveiously  in  the  late  war.  There  is,  therefore,  the 
possibility  that  in  time  of  unrest  an  idea  might  be  used 
by  unscrupulous  leaders  to  arouse  the  French  working 
classes  to  a  sudden  frenzy.  As  one  manufacturer  said  to 
the  Commission, 

'  Lei  Travailleurs  devant  La  Paix,  "  Un  Programme." 

272 


"The  French  mind  is  governed  by  ideas,  not  by  facts. 
There  is  no  danger  in  our  labor  situation  while  men  are  at 
work.  It  is  the  idle  man  who  is  dangerous.  Normally,  about 
10  per  cent  of  our  workers  in  the  automobile  industries  are  in 
the  unions,  but  in  time  of  strike  this  may  run  up  to  100  per 
cent." 

In  France  industry  has  not  reached  the  point  of  con- 
centration or  intensity  found  in  Great  Britain.  There 
are  few  factories  throughout  the  country,  probably  less 
than  10  per  cent,  that  have  more  than  50  workmen,  so 
that  direct,  personal  relations  between  employers  and 
employees  are  readily  maintained.  In  the  northeast 
section  there  was,  prior  to  the  war,  a  concentration  com- 
parable to  the  British  situation,  and  the  Metal  Trades' 
Union  shows  many  similarities  to  British  unions;  it  is 
among  the  most  radical.  In  the  same  category  is  the 
miners'  and  textile  workers'  syndicats.  It  is  significant 
in  this  connection  also  to  know  that  70  per  cent  of  the 
army  was  made  up  of  agriculturists.  French  industry, 
too,  differs  from  British  in  its  character.  Large  scale 
production  on  standard  patterns  is  not  a  characteristic 
of  French  manufactures.  Things  made  in  France  have 
individuality,  distinction,  a  touch  of  art,  an  element  of 
style,  that  gives  play  to  the  workman's  love  for  aesthetic 
qualities  even  in  everyday  useful  articles.  French 
foreign  trade  has  always  had  a  large  element  of  style  in 
it;  articles  de  Paris,  or  articles  de  luxe,  have  been  one  of 
the  most  important  items.  Such  trade  is  most  sensitive 
to  all  financial  and  industrial  disturbances,  so  that  an 
element  of  instability  permeates  French  industry.  This 
is  bound  to  be  reflected  in  the  labor  situation. 

It  is  well  to  keep  in  mind,  also,  the  fact  that  land  in 
France  does  not  run  to  large  but  to  small  holdings.  The 
agricultural  syndicats,  therefore,  have  in  them  a  strong 
influence  of  proprietary  responsibility.  In  general, 
the  French  people  are  "a  race  of  property  and  bond- 
holders," and  such  radical  ideas  as  Bolshevism  and 
advanced  socialism  find  a  strong  obstacle  in  this  fact. 
Said  one  French  manufacturer  to  the  Commission: 

"Socialism  is  not  popular  with  the  great  majority  of  the 
French  workpeople.  A  large  proportion  of  the  peasants  own 
land,  and  many  of  the  workers  in  the  cities  have  property." 

France  is  generally  considered  the  hotbed  of  radical 
political    ideas.      "Revolution,"    it    has    been    said    with 

273 


shrewd  sarcasm,  "is  the  Frenchman's  luxury."  The 
effects  of  the  French  Revolution  certainly  persist,  and 
since  the  Waldeck-Rousseau  Ministry  of  1899,  the  French 
Government  has  been  distinctly  radical,^  It  is  a  favorite 
saying  in  labor  circles  that  as  the  French  Revolution 
brought  political  freedom  and  equality,  so  the  industrial 
revolution  to  be  achieved  by  organized  labor  will  bring 
industrial  freedom  and  equality.  Political  tradition  is 
a  potent  factor  in  the  present  labor  situation. 

The  disastrous  effects  of  the  war  have  accentuated 
French  industrial  problems.  It  has  been  calculated  by 
French  employers  that  2,000,000  workers  were  killed  or 
maimed  by  the  war,  a  loss  of  at  least  9  per  cent  of  effective 
labor,  that  French  workers  had  lost  one  and  a  half  times 
more  than  Germany,  two  and  a  half  times  m.ore  than 
Belgium,  five  times  more  than  England  and  Italy,  fifty-six 
times  more  than  the  United  States,  that  there  was  certain 
to  be  a  frightful  reduction  in  the  birth  rate  for  years  to 
come,  and  that  these  things  coupled  with  a  shortening  of 
the  workday  from  10  to  8  hours,  would  cause  a  decrease 
in  production  of  French  industries  of  $2,400,000,000  or 
30  per  cent."  The  real  difficulty  in  France  today,  however, 
is  to  find  the  credit  with  which  to  obtain  coal,  materials, 
and,  in  the  devastated  area,  machinery  to  enable  factories 
to  employ  labor,  turn  out  goods,  begin  to  export,  and  help 
to  improve  the  foreign  exchange  and  the  value  of  the 
franc.  The  burden  of  debt  is  very  heavy.  Hitherto 
indirect  taxes  have  been  relied  upon,  but  today  the 
country  is  faced  with  the  necessity  of  a  resort  to  direct 
taxes,  especially  on  incomes,  to  which  there  will  be  bitter 
opposition  by  peasants  as  well  as  by  the  middle  and  richer 
classes. 

In  short,  the  vital  question  for  France  today,  indus- 
trially, commercially,  financially,  is  credit.  Unless  taxes 
that  produce  results  are  imposed  there  can  be  no  proof 
to  her  creditors  that  France  can  carry  the  interest  on  her 
debt,  together  with  thi  other  burdens  of  the  war  and  her 
normal  budget.  Until  this  proof  is  given,  little  credit  is 
likely  to  be  forthcoming.  But  drastic  taxation  laws 
would  most  likely  be  so  unpopular  that  any  Alinistry 
proposing  them  would  be  driven  from  office.  In  such 
situation  business  is  largely  at  a  standstill,  and,  it  must 

'Levasscur:  The  Annals,  Labor  and  Wages. 
*  La  Question  de  !a  jovrn&e  de  huit  heures. 

274 


be  added,  there  seems  to  have  been  on  the  part  of  govern- 
mental authority  an  impractical  opposition  to  imports, 
a  policy  which  prevents  any  considerable  employment  of 
labor.  But  M.  Loucheur,  the  official  responsible  for  this 
policy,  has  failed  to  secure  a  vote  of  confidence  and  must 
go,  and  the  restrictions  are  being  relaxed.  France  must, 
as  often  before,  rely  on  the  thrift  and  persistent  industry 
of  her  people. 

The  entire  French  industrial  situation  must  be  inter- 
preted in  the  light  of  the  soul-stirring  unrest  created  by 
the  war.  The  inevitable  nervous  reaction  from  the  four 
and  a  half  years  of  struggle,  the  incalculable  losses  in 
property,  in  life,  in  human  energy,  the  disruption  of 
normal  trade,  the  mobilization  of  men  and  industry  for 
war,  the  extension  of  governmental  control  are  all  parts 
of  the  problem.  On  the  background  of  this  general  situa- 
tion it  is  now  proposed  to  throw  the  details  of  the  labor 
problem  in  France. 

§2.     Organizations  of  Employers  and  Empioyees 

As  in  all  industrial  countries,  so  in  France  there  are 
the  two  overlapping  organizations  among  workingmen. 
One  is  the  organization  along  some  kind  of  trade  or  in- 
dustrial lines;  the  other  on  a  political  basis.  The  former 
is  called  in  French  the  syndicate  which  "is  a  union  of 
workingmen,  on  a  trade  or  on  an  industrial  basis,  for  the 
defense  of  economic  interests."^  That  is,  a  syndicat  is 
equivalent  to  the  English  trade  union,  and  the  abstract 
principle  for  which  it  stands,  called  in  French  syndicalism^ 
is  equivalent  to  the  English  unionism.  Although  the  words 
syndicat  and  syndicalism  have  taken  on  the  peculiar  flavor 
characteristic  of  French  temperament  and  philosophy, 
they  will  be  used  as  synonymous  with  the  English  words 
Unions  and  Unionism  throughout  this  discussion.  The 
other  type  of  organization  is  the  Socialist  Party,  political 
in  character  and  in  aims. 

Of  the  labor  organizations  on  a  trade  or  industrial  basis, 
the  foremost  and  the  dominating  one  is  the  General  Con- 
federation of  Labor  {Confederation  Generale  du  Travail), 
commonly  spoken  of  for  the  sake  of  brevity  as  the  C.  G.  T. 
It  is  a  national  organization  made  up  of  "National  Federa- 
tions  of   industries    and    trades,   of  National    Syndicats, 

^  Levlne,  L.:  "Syndicalism  in  France.  Studies  in  History,  Economics,  and 
Public  Law,"  Vol.  XLVI,  1911-1912,  p.  5. 

275 


of  Isolated  syndicats  (In  that  case  only  if  there  is  no 
national  or  regional  federation  of  the  trade,  or  if  the 
federation  does  not  adhere  to  the  Confederation),  and  of 
Bourses  de  Travail  (Labor  Exchanges),  considered  as 
local,  departmental,  or  regional  central  unions."^ 

This  dominating  Confederation  divides  Into  two  parts; 
one  the  Labor  Exchanges  {Bourses  de  Travail)^  the  other 
the  Confederal  Committee.  The  exchanges  are  really 
labor  community  centers  in  essence;  they  are  centers  for 
talk,  for  employment  work,  for  public  meetings,  for 
making  announcements,  for  propaganda  service,  etc. 
The  first  one  was  established  In  Paris,  1884,  and  from 
that  time  on  began  to  displace  the  Government  labor 
exchanges.  In  1914  there  were  144  exchanges,  with 
486,404  "adhering  effective  syndicats."-  From  their 
functions  it  may  be  seen  that  they  correspond  In  a  broad 
way  to  the  New  England  town  meetings.  They  have 
always  proved  to  be  the  source  of  radical  activities  of 
organized  labor. 

The  Confederal  Committee  is  formed  by  delegates  of 
"adhering  organizations,"  that  Is,  members  of  the  C.  G.  T» 
There  Is  one  delegate  for  each  organization,  although  a 
single  delegate  is  permitted  to  combine  in  himself  the 
power  to  speak  for  at  most  three  organizations.  This  is, 
then,  the  national  representative  of  the  labor  unions  of 
France.  It  meets  regularly,  and  extra  meetings  may  be 
called  by  the  secretary.  It  deals  with  national  questions 
or  those  of  Interest  to  different  syndicats  oeyond  the  scope 
of  the  exchanges.  It  has  connections  with  the  inter- 
national federation  of  trade  unions.  At  present.  It  claims 
about  600,000  members.  Admittedly,  it  speaks  for 
French  organized  labor.  The  most  prominent  members 
In  the  C.  G.  T.  today  are  MM.  Albert  Thomas  and 
Leon  Jouhaux.'^ 

Political  organizations  to  represent  the  Socialists  of 
France  have  had  a  checkered  career.  Time  and  again 
political  differences  have  broken  the  ranks,  and  the 
"left  wing"  has  started  a  rival  party.  Almost  always, 
too,  the  revolt  has  followed  the  strong  leadership  of  some 
individual,  and  so  there  have  been  Gucsdists,  the  Brous- 

'  Levine:  "Syndicalism  in  France,"  p.  162. 
"^  Annuaire  Statisiique,  1014-1915,  p.  l.'^^f). 

'  For  a  full  treatment  of  these  organizations,  see  Levine:  "  Syndicalism  in 
France,"  Chapters  Il-Vll.     Cf.  also  "  Labor  Organizations,"  Chapter  IV. 

276 


sists,  the  Marxists,  the  Allemanists,  the  Blanquists,  or 
the  theories  of  some  "school,"  and  so  has  developed 
numerous  "isms."  Successful  politicians  have  risen  from 
the  socialist  ranks,  also,  such  as  Millerand,  Jaures,  and 
Viviani.  Like  all  socialist  movements,  the  French  has 
appealed  especially  to  two  classes,  the  "intellectuals" 
and  the  workingmen.  Without  following  through  in 
detail  their  growth,  it  may  be  said  that  since  1899  the 
Socialist  Party  has  been  a  strong  one  in  France,  even 
though  its  achievements  have  not  been  great;  that 
there  are  today  two  socialist  political  groups,  the  United 
Socialists  and  the  Independent  Socialists;  that  together 
they  have  132  deputies  in  the  French  Chamber  out  of 
602;  and  that  they  have  had  as  premiers  such  men  as 
Millerand  and  Viviani.  They  are  distinctly  to  be  reck- 
oned with. 

The  Socialist  Party  and  the  syndicats  in  France,  as 
elsewhere,  certainly  have  the  same  tap  root  which  runs 
deep  Into  industrial  problems.  It  has  not  been  possible, 
however,  for  them  either  to  unite  or  to  work  In  harmony 
together.  The  Socialist  group  was  split  off  from  the 
C.  G.  T.  on  the  basis  of  methods;  it  was  the  old  division 
between  industrial  or  direct  action  and  political  action, 
with  a  characteristically  French  slant  to  It.  The  split 
was  begun  at  the  Congress  of  Marseilles,  1879,  and 
completed  at  Havre,  1880. 

"The  Socialists  called  upon  the  workingmen  to  participate 
in  the  parliamentary  life  of  the  Community.  Political  absten- 
tion, they  asserted,  is  neither  helpful  nor  possible."  ^ 

The  one  party,  the  parliamentary  socialists,  or  Collectl- 
vlsts,  while  agreeing  with  the  other  party,  the  Communist- 
Anarchists,  that  all  means  of  production  should  be  appro- 
priated, believed  that  the  emancipation  of  the  workmen 
could  be  secured  through  a  socialized  state.  The  Com- 
munist-Anarchists, on  the  other  hand,  held  that  "the 
first  act  In  the  Social  Revolution,  In  their  opinion,  had  to 
be  the  destruction  of  the  state. "^  One  writer  has  said 
that  parliamentary  action  is 

"a  pell-mell  of  compromise,  of  corruption,  of  charlatanism, 
and  of  absurdities,  which  does  no  constructive  work,  while  it 
destroys  character  and  kills  the  revolutionary  spirit  by  hold- 
ing the  masses  under  a  fatal  illusion."^ 

^Levine:  "Syndicalism  in  France,"  p.  55. 

2  Ibid.,  p.  54. 

' "  Pourquoi  Guesde  n'est-il  pas  Anarchiste,"  p.  6. 

277 


The  split  upon  this  issue  has  been  permanent.  Never- 
theless, there  is  here,  too,  an  overlapping.  In  the  C.  G.  T. 
are  those  who  believe  in  political  action  but  more  in  the 
labor  syndicat.  The  reverse  may  be  said  of  the  Socialist 
Party  as  regards  the  destruction  of  the  state.  The  line 
of  demarcation  must  not  be  too  sharply  drawn. 

The  French  social  thinking  has  been  deeply  affected 
by  the  influence  of  Marx.  The  radical  impulses  of  1848 
are  still  probably  more  active  in  France  than  anywhere 
else.  An  international  idealistic  appeal  was  sure  to  catch 
the  interest  of  the  French  mind,  and  so,  as  early  as  1891, 
after  the  Brussels  Congress,  there  was  established  an 
International  Secretariat  to  unite  the  French  labor  move- 
ment with  the  world-wide  labor  movement.  While  this 
particular  organization  was  never  strong  and  disappeared 
in  1896,  connection  with  the  international  labor  move- 
ment has  been  kept  up  by  the  C.  G.  T.  as  well  as  by  the 
Socialists. 

Such  associations  as  the  employers  of  France  have, 
are  formed  either  on  an  industry  as  the  basis  or  on  the 
basis  of  a  political  region  such  as  a  "department."  There 
seems  to  be  no  national  organization  of  producers.  Your 
Commission  talked  with  representatives  of  the  Automo- 
bile Association  of  France,  who  told  us  that  most  em- 
ployers and  most  employees  were  apathetic  toward 
labor  problems,  but  that  the  employers  were  beginning 
to  get  together.  It  is  well  to  note,  however,  that  some 
at  least  of  the  functions  of  employers'  associations  are 
being  performed  by  the  Chambers  of  Commerce,  of  which 
there  are  155  in  France. 

"The  purpose  of  the  Chambers  of  Commerce  is  to  advise 
the  Government,  and  to  give  information  on  all  industrial, 
commercial,  agricultural,  and  transportation  matters,  es- 
pecially with  a  view  to  promoting  the  prosperity  of  the 
locality  which  they  represent,  and  to  undertake  the  execution 
of  certain  public  works  and  the  administration  or  superinten- 
dence ot  public  services  which  vary  according  to  circumstances. 
Accordingly,  they  operate  trade  schools  and  museums,  give 
public  lectures,  etc.  The  Government  invariably  seeks  the 
advice  of  the  Chambers  of  Commerce  on  all  matters  affecting 
the  productive  and  distributive  interests  of  the  section,  such 
as  Commercial  Exchanges,  joint  boards  of  employers  and  em- 
ployees for  the  purpose  of  adjusting  difficulties  between 
employers    and    labor,    known    as  conseils  des  prud' hommes 

278 


(committees  of  wise  men),  and  also  on  matters  regarding 
certain  taxes,  public  works,  etc.,  and  on  tariff  and  customs 
questions."^ 

Here,  then,  in  the  committees  of  "wise  men"  is  the 
machinery  for  getting  the  employer  and  his  workmen 
together.  It  is  under  governmental  control,  with  the 
Chambers  of  Commerce  as  advisers.  Taken  in  connec- 
tion with  the  smallness  of  the  general  run  of  industries, 
the  proper  spirit  of  co-operation  on  the  part  of  employers 
and  workmen  will  readily  correct  defects  and  make  these 
councils  or  some  modification  of  them  effective. 

§  3.     French  Labor  in  the  War 

Organized  labor  in  France,  prior  to  1914,  had  long  held 
strong  anti-militaristic  opinions.  It  had  objected  to  the 
legislation  for  compulsory  military  training  and  had 
opposed  its  enforcement  when  passed. 

"The  brilliant  leader  Jaures  openly  advocated  the  abolition 
of  the  army  and  the  creation  of  a  national  militia.  Some  anti- 
militarists,  like  Herve,  carried  their  theories  beyond  all  bounds 
and  rhetorically  talked  of  dragging  the  national  flag  in  the 
mire."  ' 

The  years  from  1907  on  were  filled  with  the  troubles 
due  to  the  strained  and  unsatisfactory  relations  between 
France  and  Germany  and  with  internal  political,  religious, 
and  labor  difficulties.  It  was  not  until  after  the  Agadir 
affair  (1910)  that  the  French  people  saw  the  Irrepressible 
conflict  with  Germany  and  rallied  to  the  support  of  the 
army.  Even  then  the  C.  G.  T.  fomented  trouble  by 
propaganda  among  the  soldiers  in  training  and  in  one  or 
two  cases  succeeded  in  stirring  up  a  revolt  against  the 
extended  time  of  compulsory  service.  At  the  Congress  of 
Marseilles,  September,  1908,  a  resolution  was  passed 
which  embodied  the  following: 

"That  whereas,  consequently,  every  war  is  but  an  outrage 
against  the  workingmen;  that  it  is  a  bloody  and  terrible 
means  of  diverting  them  from  their  demands,  the  Congress 
declares  it  necessary,  from  the  international  point  of  view, 
to  enlighten  the  workingmen,  in  order  that  in  case  of  war  they 
may  reply  to  the  declaration  of  war  by  a  declaration  of  a 
revolutionary  general  strike."^ 

^  "  Franco-American  Trade,"  p.  97. 

2  Wright :    "  The  Third  French  Republic,"  Houghton,  Mifflin,  1916,  p.  166. 
^  "XVI  Congres  National  Corporatif,"  p.  213. 

279 


There  was  a  distinct  movement  by  the  C.  G.  T.  to  put 
aside  anti-militaristic  propaganda  in  1913.  Such  leaders 
as  Jouhaux  and  Merrheim  were  weary  of  these  agitations 
that  constantly  disrupted  the  ranks  of  organized  labor. 
They  wanted  to  return  to  matters  purely  industrial  upon 
which  the  majority  could  agree.  Nevertheless,  the 
C.  G.  T.  stood  on  record  against  any  declaration  of  war. 
This  was  the  situation  as  the  war  cloud  lowered  in  the 
summer  of  1914.  And  when  Austria's  ultimatum  was 
sent  to  Serbia,  and  Germany  rallied  to  the  aid  of  her 
ally,  a  delegation  of  German  workmen  was  hastily  sum- 
moned to  Paris  for  consultation  with  French  organized 
labor  leaders.  No  agreement  could  be  reached,  and  the 
delegation  hurried  back  home.  Then  came  the  inva- 
sion of  Belgium,  the  call  of  the  Government  for  the 
French  people  to  defend  their  country.  Organized  labor 
responded  with  a  spirit  that  thrilled  the  world. ^ 

There  was  no  inconsistency  in  the  French  mind  between 
profession  and  action.  It  is  a  characteristic  of  French 
intellect  to  demand  a  logical  sequence.  War  was  a  no 
less  "monstrous  thing"  {la  chose  monstrueuse)  than  before, 
but  this  war  aimed  a  blow  at  the  foundations  of  freedom 
and  justice,  for  which  organized  labor  stood.  And  French 
laborers  rallied  to  the  work  of  war  on  the  battle  line 
and  in  the  shop  with  a  cry  on  their  lips  which  showed 
how  they  reconciled  the  previous  anti-war  professions 
with  their  present  actions:  ''Guerre  a  la  guerre!''  (War 
against  war.)  This  may  have  been  in  part  the  emotional- 
intellectual  appeal  of  ideas  to  the  French  mind,  but  it  is 
also  a  steadfast  expression  of  purpose  and  is  in  absolute 
accord  with  their  subsequent  actions.  In  fact,  the  labor 
situation  in  France  today  has  largely  grown  out  of  this 
attitude. 

Like  labor  organizations  elsewhere,  French  workingmen 
suffered  much  and  yielded  much  during  the  war.  They 
obeyed  the  call  to  shoulder  arms  and  left  workshop  and 
farm.  They  returned  at  call  to  apply  their  skilHn  supply- 
ing munitions  of  war.  They  submitted  to  being  moved 
to  new  districts  where  new  factories  sprang  up.  They 
endured  being  huddled  together,  occupying  temporized 
beds  in  relays,  being  separated  from  their  families,  being 
forced  to  live  and  to  work  in  insanitary  conditions, 
having    the    working-day    lengthened,  —  they   submitted 

1  Cf.  La  Balaillc,  1014. 

280 


even  though  protestlngly.^  One  of  their  leaders,  M. 
Albert  Thomas,  became  Minister  of  Munitions.  In  the 
early  period  of  the  war  strikes  almost  ceased.  As  the 
cost  of  living  pressed  more  and  more  heavily  on  them, 
the  workers  did  resort  to  this  old  weapon  for  increasing 
wages. ^  The  strike  curve  in  France  only  shows  the  same 
trend  as  in  every  other  warring  country.  On  the  whole, 
French  organized  labor  upheld  the  war. 

When  the  armistice  carne,  labor  organizations  began  to 
function  more  actively.  M.  Leon  Jouhaux,  Secretary  of 
the  C.  G.  T.,  published  his  pamphlet,  "Les  Travailleurs 
devant  La  Paix,"  in  which  he  states  a  program  for  labor 
to  follow.  This  will  be  discussed  later  in  detail.  The 
high  cost  of  living  increased;  unemployment  increased; 
demobilization  was  delayed;  wages  seemed  inadequate. 
The  unprecedented  reception  of  the  American  President, 
whose  fourteen  points  they  endorsed,  who  was  acclaimed 
by  French  workingmen  to  be  their  spokesman,  was 
followed  by  reaction  at  unattained  results.  A  threatened 
railway  strike  in  January  was  suppressed  by  the  Govern- 
ment; an  actual  strike  by  the  miners  succeeded  in  shorten- 
ing their  day  and  increasing  their  wages;  an  impending 
strike  of  the  postal  unions  was  averted  by  being  converted 
into  a  "silent  strike"  for  the  brief  space  of  one  hour. 
Here  and  there  local  strikes  occurred.  But  these  do  not 
demonstrate  clearly  the  seething  unrest  among  the  masses 
of  people. 

After  the  passage  of  the  Eight-Hour  Act,  on  April  18th, 
agreements  to  bring  it  into  operation  had  been  made  and 
published,  and  then  a  violent  spasm  of  strikes  broke  out. 
They  began  with  a  strike  of  employees  in  the  banks  and 
Exchange,  then  spread  to  food,  clothing,  metal,  building 
trades,  and  to  the  mines.  In  the  metal  trades  it  was 
estimated  that  150,000  workers  were  out.  Threats  of 
other  strikes  came  thick  and  fast,  from  the  plumbers, 
lithographers,  nickel  polishers,  butchers,  makers  of 
flowers  and  feathers,  dramatic  artists,  picture-show 
artists,  carriage  repairers,  gas-lighters.  Theburden  of  the 
demand  was  the  eight-hour  day,  and  a  close  second  was 
increase  of  wages.  The  apparently  cheerful  optimism 
of  many  employers  whom  the  Commission  interviewed 
did  not  seem  to  be  justified  by  later  events.^ 

'  Cf.  Leon  Jouhaux:  "  La  Bataille,  Les  Travailleurs  dans  la  Guerre." 
^  Cf.  Roger  Picard:  "  Les  Greves  et  La  Guerre,  Enquetes  Soumises  au  Comite 
National  d'Etudes  Sociales  et  Politiques,"  1917. 

'  See  copies  of  ^Information  and  La  Democratie  Nouvellc  for  period. 

281 


Apparently  something  had  held  the  radical  elements  in 
organized  labor  in  check  hitherto.  They  were  probably 
restrained  by  the  hope  and  faith  in  the  Peace  Conference. 
As  has  been  pointed  out,  only  credit  and  a  wise,  speedy 
financial  policy  can  save  the  situation  from  disaster. 

§  4.  A'Tethods  of  Organized  Labor  in  France 
Political  leaders  in  France  have  proved  disappointing 
to  organized  labor,  one  and  all.  When  raised  to  power 
they  seemed  to  assume  an  attitude  of  compromise  with 
the  capitalist  government.  As  a  matter  of  fact,  it  is 
true  that  Millerand,  Briand,  and  Viviani  sought  com- 
promise. But  the  syndicalists  have  had  a  more  deeply 
seated  reason  for  refusing  to  follow  political  leaders.  The 
only  way  to  hold  labor  together  for  unified  action  was  in 
their  opinion  to  play  up  the  clash  of  class  interests. 

A  harmony  between  the  bourgeoisie  and  the  proletariat, 
such  as  Waldeck-Rousseau  sought,  would  be  disastrous 
to  syndicalism.  The  preaching  of  an  uncompromising 
class  struggle  and  the  disappointment  in  the  actual 
accomplishment  of  radicals  in  power  have  discredited 
political   leaders  with  syndicalists. 

It  may  be  observed  that  even  while  the  French  Govern- 
ment has  come  more  and  more  under  the  influence  of 
radical  socialists,  syndicalism  has  trended  definitely 
away.  That  is,  while  the  Government  was  becoming 
socialistic,  the  workers  were  becoming  revolutionary. 
"At  the  Congress  of  Lyons,  1901,  the  C.  G.  T.  may  be 
said  to  have  entered  definitely  upon  the  revolutionary 
pact."^  In  1906  the  breach  between  the  C.  G.  T.  and 
the  socialists  was  attempted  to  be  closed  with  some  hope 
for  success,  but  not  for  long.  With  the  election  of  M. 
Leon  Jouhaux  as  Secretary  of  the  C.  G.  T.,  in  1909,  the 
triumph  of  revolutionary  syndicalism  was  once  more 
secured.' 

Some  leaders  have  come  forward  who  were  not  seeking 
political  preferment,  such  men  are  MM.  Leon  Jouhaux 
and  Albert  Thomas.  To  be  sure,  they  hold  varying  shades 
of  radicalism  and  have  not  always  been  able  to  agree 
on  the  course  of  action  on  each  occasion,  but  in  the  main 
they  have  really  led  the  syndicalist  movement.     Broadly, 

'  Lcvinc,  "  Syndicalism  in  France,"  p.  122. 

*  Some  kind  of  a  common  working  basis  between  the  C.  G.  T.  and  the  Socialist 
Party  was  again  secured  at  a  joint  meeting,  July,  1919. 

282 


they  have  held  that  it  is  necessary  to  overthrow  the  politi- 
cal state  and  substitute  an  industrial  state.  Patriotic 
sentiments,  according  to  their  doctrine,  mean  nothing. 
"The  workingman's  country  is  where  he  finds  work." 
As  the  resolution  passed  at  Marseilles,  1908,  has  it:  "The 
Congress  repeats  the  formula  of  the  International:  'The 
workingmen  have  no  fatherland.'" 

Just  what  the  new  state  is  to  be,  the  common  working- 
man  has  probably  only  vague  ideas.  In  the  apt  French 
phrasing  it  has  been  called  the  "unnamed  state."  Some- 
thing definite  has,  however,  been  described  by  the  leaders. 
It  is  to  grow  out  of  the  existing  syndical  organizations 
and  to  become  a  system  of  "economic  federation." 
"According  to  the  idea  of  economic  federalism,  the 
syndicat  will  constitute  the  cell  of  society."^  Apparently, 
too,  the  Labor  Exchanges  would  take  care  of  local  and 
district  problems,  while  the  C.  G.  T.  would  look  after  the 
more  general  ones.  Railroads,  for  example,  would  become 
a  problem  for  the  C.  G.  T.,  and  likewise,  presumably, 
telegraphs,  telephones,  and  postal  service. 

Laborers  were  first  organized  in  France  to  secure  their 
aims  without  a  strike^  but  experience  taught  them  early 
the  effectiveness  of  the  strike  weapon.  The  success  of 
the  widespread  strikes  in  the  United  States,  1866-67,  and  of 
their  own  strikes  in  1869  had  great  effect.  Labor  delegates 
presented  to  the  Minister  of  Agriculture,  Commerce,  and 
Public  Works  in  1868  a  memorandum  in  which  it  is  stated 

"We  are  all  agreed  to  proceed  by  way  of  conciliation.  .  .  . 
It  is  thus  to  avoid  strikes,  guaranteeing  at  the  same  time  the 
wages  of  workingmen,  etc."^ 

The  idea  of  the  general  strike  found  adoption  in  the 
C.  G.  T.  Congress  of  Tours,  1896,  and  has  continued  as 
part  of  its  program.  Theorizing  there  had  been,  in 
unceasing  flow.  Frenchmen  may  be  bored  with  politics, 
as  some  have  claimed,  but  they  enjoy  discussion,  theoriz- 
ing, analyzing,  building  up  an  imaginative  world.  There 
is  another  side,  however,  a  clear-cut  realism  which  dis- 
played itself  emphatically  in  the  Paris  Peace  Conference. 
When  it  comes  to  action  the  plan  must  be  a  practical  one, 
taking  frankly  into  account  all  the  selfish  weaknesses  of 
human  nature.  This  is  doubtless  one  powerful  cause  for  the 
trend  away  from  political  action  toward  industrial  action. 

^  Levine,  p.  134. 

^  Lagardelle,  "  Evolution  des  Syndicalistes,"  pp.  218-19. 

^  Quoted,  Levine,  p.  37. 

283 


As  has  been  pointed  out  above,  the  election  of  Jouhaux, 
1909,  as  Secretary  of  the  C.  G.  T.,  secured  the  triumph  of 
revolutionary  syndicalism.  In  stating  one  phase  of  his 
doctrine,  he  said: 

"It  is  necessary  that  the  Proletariat  should  know  that  be- 
tween parliamentary  Socialism,  which  is  tending  more  and 
more  toward  a  simple  democratization  of  existing  social  form, 
and  Syndicalism,  which  pursues  the  aim  of  a  complete  social 
reformation,  there  is  not  only  a  divergence  of  methods,  but, 
particularly,  divergence  of  aims."^ 

The  divergent  methods  to  secure  the  divergent  aims, 
endorsed  by  the  C.  G.  T.,  are  strikes,  the  label,  boycotts, 
and  sabotage. 

There  is  one  very  practical  fact  that  made  industrial 
action  of  a  sudden,  overwhelming,  effective  sort  especially 
appeal  to  French  workingmen.  This  is  the  poverty  of 
the  syndicats.  The  dues  are  very  low  and  poorly  paid  in. 
There  is  reiterated  complaint  from  syndicat  officials 
that  the  funds  are  not  sufficient  to  carry  on  the  work.  It 
was  never  possible  to  accumulate  large  reserve  funds.  A 
strike  situation,  such  as  occurred  among  the  Yorkshire 
miners  in  England,  where  "the  strike  committee  has 
already  disbursed  £250,000  in  benefits,"''  would  be 
incredible  in  France.  French  workmen  cannot  afford 
prolonged  idleness;  they  must,  therefore,  resort  to  swift, 
immediately  effective  action,  or  to  persistent  nagging 
methods  while  work  goes  on.  The  latter  is  sabotage;  the 
former  is  the  general  strike.    Both  are  industrial  action. 

The  general  strike  has  gained  wide  acceptance  among 
French  workers.  The  first  vote  on  it  as  a  method  was 
taken  by  the  Syndicats  at  Bordeaux,  1888.  It  was  then 
conceived  of  as  being  "a  peaceful  cessation  of  work,"  or 
a  "peaceful  strike  with  folded  arms."  The  labor  leaders 
at  least  pretend  to  believe  that  almost  in  the  twinkling 
of  an  eye  industry  will  be  transformed  if  the  general 
strike  is  effectively  used.  Up  to  the  present,  something 
has  always  gone  wrong  with  the  plans. 

In  actual  practice  it  has  been  found  that  the  general 
strike,  even  when  not  involving  all  industry,  can  be  used 
with  considerable  effect  to  secure  political  aims  of  less 
consequence  than  the  total  annihilation  of  the  state.  It 
has  been  used  as  a  political  weapon.    Take,  as  an  example, 

'  Quoted  by  Levine,  p.  200. 

^Industrial  News  Survey,  Vol.  Ill,  No.  24,  p.  5. 

284 


the  Labor  Day  (May  1,  1919)  demonstration,  when  the 
order  went  out  from  C.  G.  T.  headquarters  that  all 
economic  activity  involving  labor  must  cease  for  the  day 
in  order  to  show  the  supreme  importance  of  workers  to 
such  activity.  It  is  to  be  remembered  that  while  only 
about  20  per  cent  of  French  labor  is  organized,  and  pro- 
bably not  more  than  600,000  organized  workers  out  of  a 
possible  1,100,000  adhere  to  the  C.  G.  T.,  the  general 
strike  policy  involves  other  than  peaceful  methods  toward 
unorganized  workers  if  they  refuse  to  comply  with  orders. 
Or  take  the  vote  for  a  general  strike  of  June  12,  1919,  as  a 
protest  against  the  delay  in  signing  peace  terms,  the  high 
cost  of  living,  the  threat  of  taxes,  the  intervention  in  the 
Russian  and  Hungarian  revolution,  and  the  delay  in 
demobilization. 

It  seems  clear,  therefore,  that  while  the  syndicalists 
have  rejected  the  political  methods  of  the  socialists,  and 
while,  intellectually,  they  reject  any  compromise  with  the 
state,  they,  as  a  practical  fact,  are  willing  to  have  one  of 
their  leaders  In  the  Ministry,  and  do  use  their  industrial 
methods  to  secure  political  aims.  The  syndicalists  may 
be  said  to  employ  politico-industrial  methods. 

§  5.  Attitude  of  Government  to  Syndicats 
When  syndicats  first  began  to  be  formed  there  were 
strict  laws  prohibiting  them.  Only  in  1868  did  the 
Ministry  declare  that,  without  changing  the  law,  it 
would  tolerate  labor  organizations.  In  1871  the  right 
to  strike  was  recognized.  The  syndicats  were  thence- 
forward free  to  pursue  their  development.  From  time 
to  time,  however,  as  In  the  railway  strikes  of  1910, 
the  Government  has  called  the  strikers  to  the  colors,  thus 
putting  them  under  military  discipline.  This  was  done 
In  the  railway  strike  of  last  January,  although  the  temper 
of  the  workers  was  such  that  its  efficacy  was  for  a  time  in 
doubt.  In  general,  during  the  war,  French  Industry 
was  strictly  under  military  control,  which  was  necessarily 
opposed  in  principle  to  syndicalism.  The  Government 
has  not,  on  the  whole,  been  hostile  to  the  syndicats,  but 
rather  conciliatory  and  placating. 

It  has  already  been  pointed  out  that  since  the  Waldeck- 
Rousseau  Ministry  (1899)  the  French  Government  has 
been  predominantly  radical.  The  Socialists  have  had 
their  own  representation  In  the  Chamber  of  Deputies, 
as  the  following  table  will  show: 

285 


MEMBERS    IN    CHAMBER    OF    DEPUTIES      (6 

02) 

Year 

United 
Socialists 

Independent 
Socialists 

Total 

1893 

1906 

1910 

1914 

40 
54 

76 
102 

'20' 

32 

30 

40 

74 

108 

132 

They  have  had  their  prime  ministers,  such  as  Millerand 
and  Vlviani,  and  their  members  of  the  Cabinet.  One 
effect  of  Socialist  politicians  has  been  a  placating  policy 
on  the  part  of  the  Government  toward  labor,  and  Socialist 
affiliations  have  been  no  great  barrier  to  political  success. 

A  considerable  body  of  legislation  friendly  to  labor 
has  been  passed  in  France.  A  few  examples  will  be  noted: 
the  right  to  strike,  1871;  a  ten-hour  day  law,  March  30, 
1900;  old  age  pension  law,  1909.  since  modified  as  the 
result  of  labor  complaints;  conciliation  and  arbitration 
law,  1917;  eight-hour  day  law,  1919.  The  results  of  the 
Commission's  inquiries  seem  to  show  that  the  conciliation 
and  arbitration  law  is  neither  widely  known  nor  effectively 
applied.  The  eight-hour  day  law  was  secured  during  the 
Peace  Conference  through  considerable  political  pressure 
and  with  the  most  reluctant  consent  of  the  employers, 
whose  objections  are  given  below. ^  The  political  pressure 
is  discussed  more  in  detail  in  a  later  section.- 

'  Position  taken  by  Employer  Members  of  a  committee  including  employer  and 
labor  leaders,  appointed  by  the  Minister  of  Labor  to  investigate  eight-hour  day. 

The  employer  members  of  the  International  Commission  of  Labor  Agreements 
representing  the  various  branches  of  French  Industry  consider  a  resume  of 
their  viewpoint  expedient  at  this  stage  of  the  Commisssion's  investigations. 

Consulted  by  the  Minister  of  Labor  as  to  whether  the  principle  of  the  eight- 
hour  day  should  be  included  in  the  Peace  Treaty,  the  employers  declared  that, 
in  their  opinion,  such  a  principle  should  not  be  inserted  in  the  Treaty. 

The  employers  have  proven  by  official  statistics  that: 

1.  Before  the  war  the  total  national  production  was  valued  at  about  40 
thousand  million  francs. 

2.  The  death  or  incapacitation  of  almost  two  million  Frenchmen  in  their 
prime  has  diminished  the  number  of  industrial,  commercial,  and  agricultural 
producers  about  9  per  cent. 

3.  In  this  loss  of  manual  labor  France  is  affected: 

\yi  times  more  than  Germany,  5  times  more  than  Italy, 

2         "  "       "    Belgium,  56     "  "       "    the  United  States. 

5         "  "       "    England, 

4.  The  shocking  lowering  of  the  birth  rate  in  France,  which  will  be  felt 
until  1950;  the  20  per  cent  reduction  of  the  working-day  owing  to  the  substitu- 
tion of  the  ten-hour  by  the  eight-hour  day.  This  will  result  practically  in  a  30 
per  cent  reduction  of  the  productive  capacity  of  France,  which  will  bring  about 
a  deduction  of  11  or  12  thousand  million  francs  from  the  40  thousand  million 
cited  above.  Only  a  negligible  part  of  this  loss  could  be  retrieved  by  an  increase 
in  production. 

*  Cf.  "International  Political  Labor  Movement,"  Chap.  XX,  p.  308. 

286 


After  this  specfic  statement  of  the  stand  taken  by  employers 
the  general  economic  conditions  of  France  are  briefly  dis- 
cussed. Owing  to  the  serious  situation  the  manufacturers  feel 
that  a  general  and  simultaneous  reduction  of  working  hours 
in  the  various  branches  of  industry  would  have  a  "disastrous 
effect"  on  national  production.  They  believe  that  were  they 
not  to  state  this  opinion  frankly  they  would  be  "breaking 
faith  with  their  professional  and  civic  obligation." 

They  point  out  that  the  eight-hour  day  would  cause  agri- 
cultural labor  to  immigrate  into  the  cities.  Particularly  as 
about  55  per  cent  of  the  men  lost  in  the  war  were  agricultural 
laborers,  this  effect  of  the  eight-hour  day  would  be  serious. 
Furthermore,  the  employers  emphasize  that  even  a  further 
development  of  machinery  will  not  counteract  the  loss  of  labor 
resulting  from  the  eight-hour  day,  particularly  as  in  the  main 
industries  of  France  even  highly  specialized  machinery  cannot 
replace  labor. 

If  this  eight-hour  day  clause  is  included  in  the  Peace  Treaty, 
the  employers  suggest  that  their  Government  receive  for 
France  special  privileges  along  this  line. 

As  the  representatives  of  labor  have  stated  that  the  eight- 
hour  day  will  not  decrease  production,  the  employers  are  ready 
to  investigate  measures  to  bring  this  about.  Such  an  in- 
vestigation should  include  the  consideration  of  the  following 
points: 

1.  General  regulations  covering  hours  of  work:  limitations 
by  day,  week,  year,  etc. 

2.  Extensions  and  agreements  which  may  be  provided 
either  for  industry  as  a  whole;  for  certain  industries; 
for  certain  regions,  particularly  the  invaded  ones; 
extensions  and  agreements  should  maintain  or  restore 
the  minimum  local  or  regional  production. 

3.  Permanent  derogations  to  be  instituted  for  certain  indus- 
tries the  execution  of  which  would  not  fit  into  the  general 
regulations. 

4.  Temporary  derogations  to  be  instituted  for  the  industries 
as  a  whole,  in  case  of  unusual  increase  of  work,  national 
necessity  or  accidents. 

§  6.    Relation  between  Employer  and  Employee 

We  come  now  to  the  real  point  at  issue;  what  is  the 
relation  between  the  French  employer  and  his  workmen? 
The  Commission  secured  evidence  on  the  question  from 
both  sides,  and  can  sum  up  its  findings  as  follows: 

(1)  There  seemed  to  prevail  a  general  spirit  of  op- 
timism or  even  nonchalance  as  regards  the  labor  situation, 

287 


and  particularly  on  the  part  of  employers.  The  labor 
problem  did  not  appear  to  them  to  be  the  most  pressing 
one  they  had  to  face.    Said  one  employer: 

"With  plenty  of  work,  there  is  no  serious  labor  problem 
in  France." 

Said  another: 

"There  is  no  cause  for  worry  about  the  labor  situation  in 
France;   the  only  serious  trouble  is  financial." 

They  seem  to  feel,  too,  a  confident  strength  in  their  posi- 
tion and  to  believe  that,  if  reconstruction  work  begins  soon 
and  unemployment  disappears,  they  can  handle  any  such 
problems  as  may  arise.  It  is  the  idle  French  worker 
who  is  dangerous,  not  the  radical  leader  or  the  syndicat. 
And  on  the  labor  side,  a  similar  optimistic  assurance  was 
expressed  by  a  prominent  leader: 

"Until  recently,  tradition  has  governed  both  masters  and 
men  and  they  have  insisted  on  continuing  to  work  as  they 
always  have  done  before.    Now  both  are  ready  to  advance." 

(2)  The  French  employers  do  not  seem  to  feel  that 
theirs  is  a  unionized  labor  problem  so  much  as  a  general 
social  problem.  It  was  agreed  that  syndicalism  was 
spreading  rapidly  among  French  labor  at  the  present 
time,  but  there  was,  nevertheless,  no  apprehension 
directly  from  this  fact. 

"Labor  Unions  are  not  strong,  except  in  the  large  concerns, 
and  there  are  not  many  large  concerns  in  France.  90  per  cent 
of  the  shops  employ  not  more  than  fifty  men  each.  In  these 
small  shops  there  are  no  labor  troubles." 

Or,  again: 

"French  labor  can  easily  be  controlled  with  a  firm  hand." 

"The  employers  in  the  Lyons  district  are  working  in  close 
co-operation.  They  are  also  getting  along  very  well  with  the 
better  class  of  labor  leaders." 

(3)  There  was  no  evidence  of  collective  bargaining 
between  P^rcnch  employer  and  employee.  The  working 
contract  runs  on  the  basis  of  an  individual  contract  in 
France.  An  employer  from  a  large  plant  said  that  his 
company  made  individual  written  contracts  with  the 
men.  He  gave  the  Commission  some  copies  of  the  regular 
form  of  contract: 

288 


"There  was,"  he  said,  "no  serious  objection  to  these 
individual  contracts  by  the  labor  unions.  The  workmen 
favor  them  strongly.  The  Frenchman  likes  to  feel  that  he  is 
making  his  own  agreements,  and  likes  to  see  his  name  signed 
to  an  agreement.  Any  difficulties  that  arise  out  of  these 
agreements   are  settled  by  the  Conseils  des  Prud'hommes." 

M.  Andre  Citroen  said  to  the  Commission  in  regard  to 
his  own  shop  and  to  the  situation  in  general: 

"There  is  no  collective  bargaining  in  this  shop,  and  this 
[collective  bargaining]  is  not  a  general  practice  in  France." 

(4)  There  does  not  seem  to  be  the  attitude  of  French 
labor,  as  is  true  of  British,  to  restrict  output.  One 
manufacturer  after  another  told  the  Commission  that 
such  a  disposition  was  not  now  to  be  found  among  their 
workmen.  It  has  been  noted  that  France  is  different 
from  Great  Britain  in  being  a  country  with  a  deficiency 
and  not  with  a  surplus  of  labor.  This  may  be  one  reason 
for  labor's  attitude.  The  result  is  that  the  syndicats  look 
with  approval  upon  the  introduction  of  labor-saving 
devices,  of  women  workers,  and  scientific  management 
schemes.  Even  while  demanding  an  eight-hour  day,  the 
labor  leaders  tell  the  workmen  that  production  must  be 
kept  up  and  increased.^  The  program  of  the  C.  G.  T. 
as  announced  by  Leon  Jouhaux  has  been  cited.  Some 
employers  feel  confident  the  new  and  more  efficient 
methods  will  quickly  develop  out  of  this  co-operative 
attitude.     Said  one: 

"During  the  war  all  workers  began  to  realize  that  efficiency 
is  the  only  way  out  for  the  French  industries.  They  dis- 
covered that  the  old  ideas  were  based  on  bad  economics  and 
now  they  are  doing  much  better  work.  The  union  leaders  are 
arguing  for  high  efficiency." 

A  prominent  labor  leader  declared: 

"The  French  workman  is  very  adaptable.  He  will  soon 
learn  methods  of  high  production  and  intensive  operation. 
.  .  .  There  are  not  enough  workpeople  to  produce  the 
country's  necessities;  therefore,  the  labor  unions  fully  approve 
of  the  adoption  of  efficiency  methods,  and  the  workmen  are 
demanding  labor-saving  machinery." 

(5)  The  French  employers  appear  to  have  a  sympa- 
thetic understanding  of  the  laborers'  working  methods. 

1  A.  Thomas:  U Information,  March  23,  1919. 

289 


They  feel  that  they  cannot  push  their  workmen  too  hard 
or  hold  them  up  to  regulations  that  are  too  strict. 

"French  workpeople  are  not  disposed  to  steady,  continuous 
effort.  They  are  slow  in  getting  started,  and  they  have  to  walk 
around  considerably.  They  will  not  concentrate  their  efforts 
sufficiently  to  accomplish  as  much  work  in  eight  hours  as  they 
formerly  did  in  nine  or  ten.  A  Frenchman  naturally  resents 
being  ordered  about.  Even  in  war  he  had  to  be  given  much 
personal  latitude  as  a  soldier.  Individualism  is  a  great  factor 
in  the  French  disposition." 

"There  is  no  serious  objection  of  French  machinery  workers 
to  the  sixty-hour  week.  The  eight-hour  day  is  desired  only  by 
the  agitators.  The  average  French  workman  could  probably 
do  as  much  work  in  eight  hours  as  in  ten,  but  that  is  not  the 
■  French  way  of  working.  A  Frenchman  naturally  prefers  to 
stop  occasionally  and  walk  around  the  shop." 

It  is  probable  that  the  trait  here  referred  to  as  "indi- 
vidualism" would  be  called  by  an  American,  temperament. 
The  French  are  certainly  not  individualistic,  as  the  British 
are. 

(G)  It  is  noteworthy,  too,  that  the  men  interviewed 
were  united  in  their  praise  of  women  workers.  There 
are  a  great  many  in  France,  even  in  time  of  peace.  The 
official  figures  for  July,  1917,  are  626,881  women  workers. 
A  silk  manufacturer  of  Lyons  said  80  per  cent  of  his 
employees  were  women;  another  manufacturer  of  the 
same  city  said  in  his  force  of  3,000  there  were  300  women. 
Of  the  character  of  their  work,  one  man  declared: 

"Women  have  been  found  better  than  men  in  all  jobs. 
They  are  more  sober,  work  harder,  and  save  their  money." 

It  may  be  added  that  organized  workmen  have  not 
only  not  objected  to  the  introduction  of  women  workers, 
but  have  demanded  equal  pay  for  equal  work. 

(7)  Apparently  not  much  has  been  done  as  yet  in 
the  matter  of  welfare  work.  The  subject  was,  however, 
in  the  minds  of  the  men  interviewed.  Some  admitted 
frankly  that  shop  conditions  were  bad  and  must  be  im- 
proved; some  were  taking  up  with  welfare  suggestions; 
in  one  conspicuous  case  welfare  work  was  being  done 
successfully.    'J'liis  last  was  the  Citroen  plant. 

M.  Citroen  attributes  a  large  part  of  his  success  to  the 
welfare  work  carried  on  in  his  works.    This  work  is  done  as  a 

290 


pure  matter  of  business,  and  not  as  a  philanthropy.  When  he 
was  operating  at  maximum  capacity,  the  total  cost  of  the  wel- 
fare work,  including  depreciation,  was  not  more  than  3  per 
cent  of  the  annual  payroll,  and  in  normal  times  it  should  not 
exceed  4  per  cent. 

The  company  provides  all  medical  services  free,  including 
surgery,  dentistry,  etc. 

Many  families  have  all  their  representatives  in  the  works, 
fathers,  mothers,  and  children.  The  mothers  are  given  time 
to  nurse  babies  in  the  middle  of  the  morning  and  in  the  middle 
of  the  afternoon,  special  rooms  being  provided  for  the  purpose. 
Babies,  and  children  of  the  kindergarten  age,  are  taken  care 
of  by  nurses  and  teachers  paid  by  the  company.  M.  Citroen 
showed  us  an  admirable  building  situated  in  the  midst  of  a 
beautiful  garden,  and  provided  with  all  modern  conveniences, 
including  an  artistic  kindergarten  room. 

The  attitude  of  labor  is  not  wholly  in  sympathy  with 
this  experiment.    One  labor  leader  said  of  it: 

"I  am  opposed  to  the  welfare  methods  of  Citroen.  I  think 
the  masters  should  give  the  men  a  good  plant  and  should  help 
them  to  get  high  production,  but  should  cut  out  the  fancy 
welfare  work." 

About  two  weeks  after  the  interview  with  M.  Citroen, 
there  was  a  local  strike  in  his  works  for  higher  wages 
and  other  changes  in  working  conditions.  The  Com- 
mission was  advised  that  M.  Citroen  had  decided  to 
inaugurate  a  shop  committee  plan  of  handling  labor 
disputes.  What  was  the  outcome  of  the  strike  was  not 
reported  to  the  Commission. 

(8)  There  has  never  been  the  question  of  recognizing 
labor  unions  in  France  as  in  England  or  the  United  States. 
The  generally  tolerant  attitude  of  French  employers  is 
also  reflected  here,  and  apparently  the  war  has  improved 
it.  One  labor  leader  complained  rather  bitterly  that 
"only  a  few  masters  of  industry  in  France  will  confer 
with  labor  leaders  without  bitterness."  An  official  of  a 
large  employers'  association,  however,  said: 

"Employers  are  developing  with  the  union  leaders  a 
plan  for  an  employment  bureau,  managed  by  the  workers  and 
employers  jointly,  not  by  the  politicians." 

One  company  does  "not  exclude  workmen  because  of 
union  membership,  but  there  is  a  limit  to  the  permissible 
amount  of  union  activity  during  company  hours."  A 
manufacturer  said: 

291 


"Before  the  war  employers  were  opposed  to  dealing  with 
labor  leaders.  During  the  war  the  Government  had  to  deal 
with  labor  leaders,  as  the  government  officials  did  not  have 
time  to  deal  with  workpeople  individually.  Employers  were, 
therefore,  forced  to  do  the  same.  Now  the  employers  are 
disposed  to  continue  this  practice,  believing  that  the  results 
will  be  satisfactory.  No  bitterness  has  developed  in  the 
discussion  with  labor  leaders." 

(9)  On  the  whole,  there  seems  to  be  no  lack  of  machin- 
ery for  bringing  the  French  employer  into  contact  with  his 
men.  Some  employers  said  that  they  had  not  used  even 
the  Councils  of  Prud'hommes;  others  said  many  small 
problems  were  settled  by  the  Councils.  Apparently  the 
spirit  of  co-operation  makes  elaborate  machinery  un- 
necessary, even  in  the  large  plants.  One  manufacturer 
gives  an  hour  a  day,  from  six  to  seven  in  the  evening,  to 
meeting  any  of  his  men  who  have  complaints  to  make. 
Another  summed  up  the  matter  by  saying: 

"Most  employers  keep  in  touch  with  their  men.  This  is 
the  best  way  to  control  labor." 

(10)  The  French  industrialists  that  were  interviewed 
by  the  Commission  thought  there  was  much  loose  talk 
about  Bolshevism  in  labor  circles.  There  was,  however, 
in  their  judgment,  no  danger  in  that  direction  unless 
industrial  conditions  grew  worse  or  failed  to  improve. 


292 


CHAPTER  XIX 
THE  POLITICAL  LABOR  SITUATION  IN  ITALY 

§  1.     The  General  Situation 

Italy  is  not  a  highly  industrialized  country.  It  has, 
however,  a  surplus  labor  population  that  has  been  kept 
"skimmed  off"  by  emigration  for  long-term  employment 
in  foreign  oversea  lands  or  by  migratory  work  in  neighbor- 
ing states.  Italy  has  for  years  furnished  a  supply  of 
workmen  to  the  northeastern  section  of  France  and  the 
region  along  the  Rhine.  The  bulk  of  Italian  workmen  at 
home  are  engaged  in  agriculture.  Out  of  a  total  popula- 
tion, in  1917,  of  36,716,522,  there  were  9,026,076  "oc- 
cupied" with  agriculture;  4,945,994  were  engaged  in 
industry;  921,578  in  commerce.  There  were  2,476,833 
male  and  1,319,728  female  proprietors  of  land  and  facto- 
ries.^ Such  an  industrial  and  commercial  distribution  of 
population  must  have  an  important  effect  upon  the  labor 
movement. 

The  financial  burden  of  Italy  is  tremendous.  It  was 
explained  to  your  Commission  that  the  war  cost  was 
about  80,000,000,000  lire.  In  1913  the  annual  budget 
called  for  1,600,000,000  lire;  the  interest  on  the  present 
debt  is  4,000,000,000  lire;  the  total  annual  income  needed 
is  6,600,000,000  lire.  Added  to  this  is  the  most  unfavor- 
able condition  of  foreign  exchange,  which  cannot  be 
corrected  without  goods  to  export.  Factories  cannot  be 
started  without  coal  and  raw  materials,  and  Italy  does 
not  possess  either  of  these  in  substantial  quantities. 
They  must  come  from  outside  the  country  and  credit 
must  be  established  to  make  the  purchases.  As  an  illustra- 
tion of  what  this  situation  means  the  following  prices, 
which  were  in  force  from  1917  on,  are  given: 

Coal  for  steam  (Cardiff,  splint)    .    .  per  ton  385  lire 

Anthracite  cobbles      "     "  405 

Metallurgic  coke "     "  515 

Pig-iron  ematites "     "  800 

Hard  steel  for  shells        "     "  900 

Soft  steel  for  shells "     "  850 

^  "Forze  Economiche  Italiane,"  p.  1. 

293 


Hard  plated  steel per  ton  1,350  lbs. 

Soft  plated  steel      "     "  1,200     " 

Rods "     "  1,200     " 

Plates "     "  1,400     " 

Under  such  a  burden  of  debt  and  prices  social  unrest  is 
inevitable.  Almost  in  desperation,  projects  are  being 
considered  looking  toward  forced  loans  from  those  who 
have  benefited  financially  by  the  war,  or  even  the  re- 
pudiation of  internal  debts.  Socialistic  and  other  radical 
doctrines  are  bound  to  flourish. 

"Never  since  the  unification  of  Italy  has  industry  been 
faced  with  such  a  crisis,  so  rich  in  promise,  so  filled  with 
peril."  ^ 

The  many  Italians  who  have  gone  from  their  home  land 
as  colonists  or  to  work  for  a  considerable  period  abroad 
have  always  been  a  substantial  source  of  revenue  to  Italy. 
They  have  shown  themselves  to  be  industrious  and  thrifty, 
and  have  accumulated  large  sums  in  savings  banks  in 
addition  to  allowances  sent  home  from  time  to  time. 
The  sums  sent  home  from  the  United  States  have 
amounted  annually  to  about  $80,000,000.  From  those 
Italian  emigrants  who  have  gone  to  Argentina,  an  annual 
sum  of  something  like  $50,000,000  has  been  returned. 
As  a  result  of  the  war,  Italy  has  placed  an  external  debt 
with  the  United  States  and  Great  Britain  of  about 
$2,500,000,000,  the  interest  on  which,  at  5  per  cent,  would 
amount  to  about  $125,000,000,  or  approximately  the 
sum  she  could  expect  as  a  credit  in  the  international 
account  from  her  emigrants.  A  large  per  cent  of  these 
emigrants  answered  the  call  of  Italy  to  come  and  fight 
for  her  preservation  and  are  now  to  be  cared  for.  It  is 
stated  that  the  Italian  Government  is  planning  to  carry 
out  a  more  enlightened  policy  of  colonization  to  draw  off 
her  surplus  population. 

There  has  been  in  Italy  much  unrest  and  dissatisfaction 
due  to  the  slowness  with  which  demobilization  has  taken 
place.  The  Government  held  that  there  was  no  need  for 
a  carefully  laid  plan  for  returning  pivotal  men,  as  in 
Great  Britain,  because  of  the  very  large  agricultural 
element.  In  general,  it  was  arranged  to  release  the  older 
men  first.     There  was,  however,  a  decided  reluctance  on 

'  Amoroso,  L.:  "Siluazione  Economica,"  Giornalc  degli  econonusti  e  rivista 
di  Statistica,  April,  1919. 

294 


the  part  of  the  Government  to  let  the  soldiers  go  back  to 
jobless  industrial  centers.  It  has  already  been  pointed 
out  that  industry  could  not  start  moving  without  raw 
materials  and  coal,  and  these  could  not  be  had  without 
foreign  credit.  In  the  final  analysis  the  problem  in 
Italy,  as  in  France,  is  one  of  finance. 

Industrial  and  political  influences  were  interactive  in 
causing  agitation  in  Italy.  The  war,  it  must  be  remem- 
bered, did  not  receive  unanimous  support.  The  Ministe- 
rial Government  was  never  too  secure.  The  propaganda 
for  securing  broader  stretches  of  enemy  territory,  including 
Fiume,  tended  toward  unrest.  The  high  cost  of  living  was 
pressing  sorely  on  the  great  masses.  The  lack  of  industrial 
activity  was  disheartening.  Outside  influences  from 
enemy  countries  were  still  at  work. 

The  Germans  had  in  the  past  maintained  an  active  propa- 
ganda among  the  leaders  of  labor  unions  and  Socialists.  In 
one  case,  such  a  leader  had  accumulated  property  worth  a 
million  lire  and  had  become  a  member  of  Parliament.  The 
Germans  did  this  on  the  ground  that  they  could  influence  the 
labor  element,  because  they  would  believe  what  one  of  their 
own  numbers  said,  while  they  would  not  take  the  word  of  an 
employer. 

The  General  Confederation  of  Labor  {Confederazione 
Generale  del  Lavoro),  with  its  420,000  members,  co- 
operates with  the  parliamentary  Socialists.  As  elsewhere 
the  Socialist  parties  depend  largely  on  the  working  classes 
for  their  clientele;  the  Italian  Social  Union,  formed  in 
1918  in  evident  opposition  to  the  Italian  Socialist  Party, 
is  in  membership  practically  identical  with  the  Italian 
Labor  Union.  All  of  these  influences,  political  and  indus- 
trial, have  been  increasing  the  seething  unrest  throughout 
Italy. 

As  tending  to  neutralize  the  disturbing  influences 
indicated  above  have  been  the  high  prices  that  agri- 
culturists received  for  produce  and  the  high  wages  and 
war  bonuses  received  by  industrial  workers.  The  re- 
turning soldiers  have,  therefore,  found  their  families 
better  off  than  they  expected. 

The  men  returning  from  the  army,  who  had  formerly  been 
peasants,  were  happily  surprised  at  finding  their  families  at 
home  in  better  financial  condition  than  they  had  expected. 
The  reason  for  this  was  the  prices  of  agricultural  products 
produced  by  their  families  had  become  very  high  during  the 

295 


war,  and,  as  a  consequence,  they  had  more  actual  money  for 
what  they  produced  than  ever  before. 

The  employees  of  the  largest  Industrial  establishment  in 

Italy  had  averaged  before  the  war  about  6  or  8  lire  per  day. 

During  the  war  this  average  had  increased  to  about  18 

or  20  lire,  and  on  piecework  some  men  made  as  high  as 

,  $20  per  day. 

Italian  labor  is  not  highly  organized,  not  more  than 
20  per  cent  being  in  unions.  This  small  minority,  how- 
ever, is  the  radical  element,  and  by  use  of  violence  forces 
others  to  follow  its  lead.  It  is  this  policy  that  gives  a 
radical  reputation  to  Italian  labor.  The  new  element 
in  the  situation  is  the  organizing  of  office  forces,  the  fore- 
men, the  clerks,  the  superintendents,  the  draughtsmen, 
the  bookkeepers.  As  In  Great  Britain,  unionism  Is  con- 
centrated in  the  large  basic  industries.  The  three  Im- 
portant organizations  are  the  General  Confederation  of 
Labor,  with  420,000  members,  the  Italian  Labor  Union, 
with  120,000,  the  Catholic  Unions,  with  120,000.  The 
Independent  Unions,  with  a  membership  of  250,000, 
resemble  most  closely  the  American  Federation  of  Labor 
in  their  policy.  A  newly  formed  organization,  the  Italian 
Labor  Union,  was  founded  In  1918,  with  a  membership 
of  about  162,000,  and  is  opposed  to  the  General  Confedera- 
tion. 

The  Italian  laborer,  like  the  French,  Is  unwilling  to  pay 
(  burdensome  union  dues.  Membership  is,  therefore, 
'  variable,  leaping  up  to  portentous  figures  in  a  crisis, 
falling  to  a  small  per  cent  in  peaceful  times.  Unions 
cannot  accumulate  large  reserve  funds  and  are  unwilling 
to  face  a  long  drawn  out  strike.  In  Italy,  therefore,  as 
in  France,  the  movement  for  a  general  strike,  to  paralyze 
all  industry  and  bring  the  crisis  Immediately,  gains 
headway.  The  figures  of  membership  at  any  one  time 
may  be  deceptive. 

Unity  In  Italian  labor  organizations  Is  largely  super- 
ficial. One  and  all  they  contain  violent  explosive  power. 
This  fact  has  long  been  true  of  them,  as  their  history  shows. 

The  Italian  Labour  and  Socialist  movement,  like  that  of 
France,  has  been  subject  to  serious  divisions,  resulting  in  the 
formation  of  continually  shifting  groups,  which  prevent  the 
creation  of  a  united  organization.  Moreover,  as  in  France, 
there  is  a  strong  element  of  Syndicalism  in  the  Trade  Unions, 
which  hinders  effective  co-operation  between  those  bodies  and 
the  political  movement.  .  .   . 

296 


There  have  been  three  main  sections  in  the  party.  One  led 
by  Turati  is  reformist  in  character,  believing  in  political 
action  and  evolutionary  socialism.  Arturo  Labriola  was  the 
head  of  a  second  section  of  extremists.  He  left  the  party  in 
1907  to  form  a  separate  body  of  Syndicalists.  Professor 
Ferri  was  the  leader  of  an  intermediate  group  known  as 
Integralists.  In  1906,  owing  to  internal  disputes,  30  Socialist 
deputies  resigned  their  seats,  and  25  were  re-elected.  In  the 
same  year  at  the  Congress  of  the  party,  the  Syndicalist 
element  was  defeated  by  a  majority  of  five  to  one,  and  left  the 
party.  But  contention  persisted  between  the  other  groups, 
and  at  Milan  in  1910  the  followers  of  Turati  carried  a  resolu- 
tion in  support  of  their  view  and  policy  against  the  Revolu- 
tionists and  Integralists  by  a  large  majority. 

The  war  in  Tripoli  caused  further  discord.  The  Govern- 
ment were  at  first  supported  by  the  Socialists,  but  later  most 
of  them  withdrew  their  support.  Several  deputies  were  ex- 
pelled, who  then  formed  a  new  reformist  party  of  their  own. 
Professor  Ferri  resigned  from  the  party  and  the  Chamber, 
and  was  re-elected  as  an  independent.  These  dissensions, 
however,  although  fatal  to  unity  and  effectiveness,  have  not 
prevented  the  rapid  growth  of  Socialist  representation  in 
Parliament.^ 

No  better  commentary  can  be  made  on  the  volatile 
temperament  behind  the  Italian  labor  movement  than 
this  statement  of  facts.  It  shows  how  socialistic  ideas 
are  sifting  down  into  the  minds  of  workmen,  but  that  the 
reaction  is  to  make  those  minds  less  easily  controlled  by 
an  organization.  Here  lies  an  element  of  safety  and  an 
element  of  danger;  an  appeal  will  bring  quick  results, 
whether  that  appeal  is  to  the  better  impulses  or  to  the 
worse.  At  any  rate,  Italian  labor  organizations  are  builded 
upon   a  powder  mine. 

Much  blame  for  the  social  and  industrial  unrest  in 
Italy  is  cast  upon  the  Government.  The  criticism  is  aimed 
not  at  a  wrong  policy  but  at  the  lack  of  any  policy  at  all. 
There  has  been  a  failure,  it  is  said,  to  provide  any  system 
of  public  service  to  bridge  over  the  readjustment  period; 
no  readjustment  of  industries  themselves  has  been  under- 
taken by  the  Government;  there  is  no  financial  policy, 
although  bankruptcy  stares  the  Government  in  the  face; 
there  is  notorious  disorder  in  all  Government  service. 
This  lack  of  definite  stand  is  said  to  be  due  to  political 
subterfuge.  The  result  of  these  recriminations  is  an 
unstable  and  therefore  a  timorous^ministry. 

1  Labour  Yearbook,  1916,  p.  416. 

297 


§  2.     Italian  Labor  in  the  War 

The  story  of  Italian  labor  during  the  war  is  largely  the 
story  of  industrial  mobilization.  Again,  it  must  not  be 
understood  that  there  were  no  disturbing  influences, 
but  on  the  whole,  as  indicated  in  the  account  given  below, 
"the  results  seem  good."  Outside  the  "economical 
divergences,"  as,  for  instance,  the  high  cost  of  living, 
where  differences  were  settled  in  a  friendly  way,  the  work- 
people of  Italy  have  "proved  very  active  and  disciplined 
during  the  war."  There  were  but  few  strikes  and  those 
involved  a  small  number  of  men. 

The  chief  nucleus  for  the  mobilization  of  Italian 
industries  and  the  ones  that  formed  the  principal  part 
of  the  mobilized  industries  were  the  so-called  "auxiliary" 
or  controlled  establishments.^  In  order  to  intensify  and 
to  ensure  the  continuity  of  war  production,  it  was  con- 
sidered necessary  to  put  the  principal  factories  for  the 
making  of  munitions  and  war  materials  under  the  control 
of  a  special  system.  The  firms  that  were  placed  under 
that  system  bore  the  name  of  "auxiliary"  establishments. 
The  general  system  of  control  was  known  as  "auxiliarity." 
The  system  was  introduced  for  the  first  time  by  the  decree 
of  August  22,  1915.  A  following  decree  on  July  5,  1917, 
also  applied  to  those  industries  that  did  not  serve  directly 
the  production  of  war  material  but  concerned  national 
economy  and  the  general  welfare  of  the  country.  An 
industrial  establishment  could  be  officially  declared 
auxiliary  when  its  importance  and  the  character  of  its 
production  rendered  military  supervision  necessary. 
Such  supervision  was  frequently  sought  by  establishments. 

Under  the  decree  of  the  King,  announced  June  26,  1915, 
a  system  of  industrial  mobilization  was  immediately 
sought  for.  The  organization,  it  was  claimed,  must 
fulfill  the  following  conditions: 

1.  It  must  be  simple,  decentralized,  capable  of  quick  action, 
with  local  executive  officials  who  could  act  promptly  and 
who  could  be  in  direct  contact  with  the  industries. 

2.  It  must  perform  with  the  highest  possible  uniformity 
tliroughout  the  entire  country  by  means  of  general  instruc- 
tions and  directive  ideas  from  a  general  headquarters, 
which,  naturally,  had  to  be  in  Rome,  the  demands  of  the 
Arms  and  Munitions  Board. 

'  The  material  for  the  rest  of  this  section  is  taken  from  a  report  made  to  the 
Commission  by  Signor  Cavaliero  Enrico  Toniolo. 

298 


3.  It  must  provide  the  workmen,  both  civil  and  military,  with 
a  means  of  demanding  fair  treatment  and  with  a  power  of 
appeal  in  case  they  should  feel  their  rights  were  infringed 
upon. 

And  all  this  without  the  least  interruption  of  work. 

A  central  committee,  therefore,  of  industrial  mobiliza- 
tion was  organized  in  Rome  and  sub-committees,  called 
Regional  Committees,  were  organized  in  various  local 
centers.  The  rapid  increase  in  the  number  of  establish- 
ments brought  under  control  can  be  seen  from  the  follow- 
ing figures  taken  from  successive  reports: 


Number  of 
Report 

Number  of 
Establishments 

Number  of 
Skilled  Workmen 

I        

125 

290 

800 

1,000 

1,600 

1,750 

111,400 

II 

Ill                 

173,000 
325,000 

IV       

450,000 

V        

546,000 

VI              .    .           

604,000 

These  reports  do  not  include  several  establishments  of 
minor  importance. 

The  number  of  establishments  outside  of  military 
control  and  the  number  of  skilled  workmen  employed  in 
them  are  shown  by  the  following  three  reports: 


Date  of 
Report 


Number  of 
Establishments 


Number  of 
Skilled  Workmen 


December  31,  1916 
June  30,  1917  .  . 
October  31,  1917  . 


1,650 
1,700 
1,820 


89,000 
100,000 
105,000 


If  to  the  controlled  and  uncontrolled  establishments  one 
adds  the  numerous  military  establishments  that  in  the 
aggregate  employed  about  70,000  workmen,  a  total  of 
over  3,600  workshops  with  an  aggregate  of  over  780,000 
skilled  workmen  will  be  reached.  A  few  months  after 
the  period  covered  by  the  reports,  the  number  had 
mounted  to  over  1,200,000  skilled  workmen.  Even  this 
number  does  not  include  several  other  hundreds  of 
thousands  of  workmen  and  workwomen  belonging  to 
manufacturing  industries  of  various  sorts. 

299 


Among  the  780,000  workmen  employed  in  the  manu- 
facture of  arms  and  munitions,  only  about  280,000,  or  37 
per  cent,  had  been  exempted  from  active  military  service. 
This  means  that  about  one  man  out  of  three  capable  of 
serving  in  the  army  was  kept  working  in  the  munition 
factories.  It  may  be  seen  from  these  figures  that  a  very 
small  percentage  of  able-bodied  men  was  kept  back  from 
active  military  service.  As  a  matter  of  fact,  the  great 
majority  of  those  who  worked  in  the  factories  belonged 
to  the  military  class  of  some  year  preceding  1890.  Before 
the  end  of  the  war  those  men  belonging  to  the  classes  of 
1890  and  1891  were  recalled  from  the  front  line  for  service 
in  munition  factories.  The  great  body  of  workers  had 
to  be  recruited,  therefore,  from  older  men  and  from  those 
too  young  for  military  service  and  from  women  workers. 
More  than  200,000  women  and  boys  were  at  work  in  these 
factories. 

The  Italian  Government  has  expressed  its  appreciation 
and  gratitude  for  the  splendid  work  done  by  this  group  of 
workmen  "fighting,  too,  its  own  war  out,"  against  techni- 
cal difficulties  of  all  kinds,  against  danger  of  poisonous 
products,  and  against  risks  of  explosions.  This  army  also 
had  its  victims,  its  dead,  its  mutilated,  due  to  the  mishaps 
and  misfortunes  that  could  not  be  prevented  and  that  were 
increased  by  the  speed  of  the  work  and  the  lack  of  skill 
among  the  workmen. 

The  chief  features  of  the  system  of  control  were  as 
follows:  first,  the  Government  undertook  to  provide  the 
controlled  firms  with  raw  material,  especially  those  whose 
raw  materials  came  from  a  foreign  source  and  the  supply 
of  which  might  grow  scarce  if  left  to  the  individual  firms. 
In  order  to  secure  an  ample  supply  of  materials,  a  system 
of  control  and  distribution  was  established  for  coal,  steel, 
gasoline,  etc.  This  system  of  distribution  was  entirely 
under  Government  control.  Second,  the  Government 
undertook  also  to  insure  to  the  controlled  establishments 
the  necessary  skilled  workmen  by  exemption  from  military 
service,  by  professional  training,  and  by  bringing  in  skilled 
workmen  from  colonies.  In  order  to  provide  training 
for  the  unskilled  workmen,  schools  were  established  and 
placed  in  charge  of  soldiers  who  were  not  able  to  be  on 
active  service,  in  Turin,  Milan,  Modena,  Genoa,  Rome, 
Naples,  and  Palermo.  These  schools  have  trained  more 
than  12,000  workmen. 

300 


The  controlled  establishments  were  under  strict  military 
discipline  so  that  they  were  not  allowed  to  refuse  to  carry 
out  the  work  assigned  them,  which  concerned  military 
affairs.  Every  order  had  to  be  carried  out  even  if  in 
doing  so  new  or  increased  equipment  was  made  necessary. 
The  closing  down  of  plants,  strikes,  slackness,  sabotage, 
and  every  action  that  would  interfere  with  high  speed 
production  was  prohibited. 

Under  the  system  of  prohibition  and  restriction  imposed 
by  military  discipline,  it  became  necessary  for  the  Govern- 
ment to  set  up  some  kind  of  machinery  for  the  handling  of 
differences  that  arose  between  workmen  and  employers. 
There  were  the  questions  of  wages,  of  prices  of  products, 
and  of  grievances  which  had  to  be  answered.  For  the 
examination  of  differences  arising  between  employers  and 
employees.  Regional  Committees  of  Industrial  Mobiliza- 
tion were  formed,  to  which  the  power  of  making  final 
decisions  was  given.  An  appeal  from  the  decision  of  the 
Regional  Committee  to  the  Central  Committee  of  In- 
dustrial Mobilization  at  Rome  was  possible. 

The  principle  was  announced  at  the  time  of  mobilizing 
industry  that  conditions  of  labor  should  remain  the  same 
as  those  prior  to  the  war.  Nevertheless,  some  freedom 
of  action  was  granted  to  skilled  workmen  who  were 
dissatisfied  with  conditions  of  work  and  of  living.  No 
changes  in  wage  contracts,  however,  could  be  made 
without  the  approval  of  the  Regional  Committee  and  of 
the  Central  Committee  of  Industrial  Mobilization. 
During  the  war  wages  were  increased  from  time  to  time, 
either  under  the  form  of  indemnity  for  the  high  cost  of 
living  or  as  an  increase  of  pay  fully  justified  by  the  prices 
received  for  the  products. 

There  was,  at  first,  an  unregulated  extension  of  work 
hours  due  to  the  demand  for  high  speed  production  in 
military  establishments.  After  a  time,  however,  the 
Committees  of  Industrial  Mobilization  succeeded  in 
restoring  the  pre-war  work  hours,  or,  at  least,  in  reducing 
them  sufficiently  to  avoid  excessive  strain  and  exhaustion 
of  the  workmen.  With  the  entrance  into  the  arms  and 
munition  factories  of  women  workers  and  boys,  further 
restrictions  in  the  length  of  the  workday  were  made 
necessary. 

Special  circulars  were  sent  out  by  the  Industrial  Mobili- 
zation Board  regarding  the  wages  to  be  paid  to  military 

301 


workmen.  These  workmen  were  divided  into  six  classes 
and  a  minimum  wage  was  established  for  each  class. 
From  the  employers  in  these  military  establishments,  the 
workmen  were  supposed  to  receive  a  wage  equal  to  civil- 
ians who  were  doing  the  same  kind  of  work.  The  result 
was  that  many  military  workmen  received  wages  much 
higher  than  the  minimum  fixed  by  the  wage  list.  For 
instance,  a  coppersmith  detailed  to  factory  work  from 
active  service  succeeded  in  getting  8  lire  a  day.  The 
same  amount  was  paid  to  an  electrician,  a  turner,  a 
carpenter  and  plate-layer.  There  were  some  such  work- 
men that  succeeded  in  getting  even  more  than  10  or  12 
lire  per  day. 

For  the  soldiers  who  were  called  into  active  service, 
the  Government  settled  subsidies  upon  their  families 
according  to  the  following  list: 


Character  of  Individual 


Large 

Parishes 

[  Lire  ] 


Other 

Parishes 

[  Lire  ] 


Wife per  day 

Each  child n     u 

Single  parent «     " 

Single  brother  or  sister  (age  twelve  years)     "     " 

Each  other  person «     << 


When  a  soldier  was  detailed  to  factory  work,  his  family 
ceased  to  receive  the  subsidy.  It  might  be,  however,  that, 
if  the  military  workman  did  not  receive  sufficient  pay  or 
was  called  far  away  from  his  family,  the  Board  would 
reestablish  the  subsidy. 

In  order  to  insure  continuity  of  work  and  to  avoid  all 
industrial  difficulties  that  would  delay  output  and  to 
prevent  strikes,  all  workmen  in  military  establishments 
were  liable  to  become  subject  to  military  discipline  at 
the  discretion  of  the  Board.  In  this  way,  the  giving  up 
of  work  was  equal  to  desertion  from  the  army,  and  there- 
fore punishable  according  to  the  military  criminal  code. 
Any  kind  of  insubordination  or  any  refusal  to  follow 
orders,  even  of  a  technical  character,  were  punishable 
according  to  military  rules.  This  system  was  adopted  by 
the  regulation  established  August  22,  1915.  It  was  later 
modified  and  appeared  in  final  form  in  the  decree  of 
November  5,    1010.     The  judges   in   cases   of   this   kind 

302 


were  selected  from  the  military  tribunals.  Supervision 
for  inforcing  of  discipline  was  entrusted  to  army  officers. 
These  officers,  however,  did  not  supplant  the  authority 
of  foremen  or  directors  in  the  plant.  They  were  rather 
used  to  reinforce  the  rigid  discipline  in  each  establishment. 
In  this  way  it  was  possible  to  maintain  a  fairly  limited 
number  of  army  officers  employed  in  such  service.  The 
proportion  on  the  average  was  about  one  officer  for  each 
2,000  workmen.  The  mode  of  punishment  most  generally 
used  was  military  imprisonment.  The  entire  system  was 
adopted  without  objection  and  gave  on  the  whole  good 
results.  The  number  of  cases  of  serious  discipline  did  not 
reach  an  average  of  two  per  day  for  each  10,000  workmen. 

Under  this  system  of  discipline,  individual  absences 
not  justified  decreased  about  one-half  in  comparison 
with  the  preceding  period.  Strikes  of  an  economic  nature 
almost  entirely  vanished.  There  were  some  isolated 
cases  of  strikes,  but  they  were  limited  to  single  firms  and 
were  of  short  duration.  There  were  practically  no  cases 
of  factories  closing;  there  were  no  lockouts.  Dismissals, 
resignation,  transfer  from  one  establishment  to  another 
without  permission  were  absolutely  regulated.  The 
number  of  cases  settled  by  Regional  Committees  up  to 
August,  1917,  was  289  and  involved  170,000  workmen. 
The  differences  settled  by  arbitration  numbered  81  and 
involved  63,000  workmen.  There  were  30  appeals  from 
the  Regional  Committees  to  the  Central  Committee. 


§  3.     Italian  Labor  Since  the  Armistice 

The  period  since  the  signing  of  the  armistice  has  been 
one  of  increasing  unrest  among  Italian  workpeople.  Al- 
though not  highly  organized,  the  workmen  of  Italy  who 
;.re  radical  make  up  the  primal  force  of  labor  unions  and 
are  able  to  swing  into  line,  in  the  emergency,  a  large 
number  of  the  unorganized. 

From  among  the  unions  come  the  agitators,  and  these 
have  found  fruitful  fields  in  Italy  since  November  11th. 
The  ferment  that  was  repressed  during  the  war  rose  when 
the  fighting  was  over,  flashing  out  here  and  there  in 
strikes  and  riots.  Gradually  there  floated  into  definition 
a  plan  for  a  general  strike  to  secure,  as  the  radicals  put  it, 
"the  dictatorship  of  the  proletariat."  The  first  date  set 
for  such  a  strike  was  Labor  Day,  May  1st,  but  this  proving 

303 


abortive,  a  second  date,  July  21st,  was  set.  As  this  day 
approached,  labor  disturbances  increased  in  number  and 
violence,  but  the  movement  failed  to  culminate  in  a 
general  strike. 

As  in  France  and  Great  Britain,  the  causes  of  unrest 
in  Italy  are  partly  social,  partly  political,  and  partly  in- 
dustrial. The  widespread  poverty  in  Italy  has  been 
accentuated  by  the  excessively  high  prices  of  foodstuffs 
and  wearing  apparel.  Bread  riots  have  been  of  frequent 
occurrence  and  of  violent  character  since  the  armistice. 
Political  dissensions  were  rife  in  Italy  during  the  war  and 
instability  marked  the  Ministry  that  was  finally  displaced 
in  June.  The  Fiume  incident  points  the  moral  here.  The 
big  economic  problems  in  Italy  have  been  {a)  finance, 
{b)  industrial  readjustment  to  peace-time  basis,  (c)  coal 
and  raw  materials,  and  {d)  transportation.^  These  are, 
of  course,  interacting  influences,  the  lack  of  foreign  credits 
preventing  the  purchase  of  raw  materials  which  in  their 
turn  were  essential  to  a  revival  of  industry,  and  the  lack 
of  transportation  preventing  the  import  of  coal.  Without 
the  desired  revival  of  industry,  the  soldiers  were  kept 
mobilized  to  obviate  unemployment  and  prices  rose  until 
they  were  40  per  cent  higher  than  elsewhere. 

During  the  war  wages  had  risen  rapidly  in  Italy,  as 
elsewhere.  After  the  armistice  the  demands  of  labor 
were  often  extravagant  in  character.  In  one  large  plant 
visited  by  the  Commission  there  was  a  serious  strike. 

Some  time  before,  they  granted  theeight-hourday;  then  their 
clerks,  boolckeepers,  and  office  help  formed  a  syndicat  and  struck 
for  a  30  per  cent  advance  on  the  first  100  lire  of  the  monthly 
wage  and  10  per  cent  on  the  second  100  lire  of  the  monthly 
wage.  The  company  conceded  these  rates  and  the  men  re- 
turned to  work.  The  present  wage  for  this  class  of  work  runs 
from  400  to  1,200  lire  per  month.  Following  this  the  engi- 
neers, who  include  designers,  draftsmen,  shop  superintendents, 
foremen,  instructors,  etc.,  seeing  how  easily  the  office  force 
had  secured  their  demands,  formed  a  syndicat  consisting  of 
1,000  employees  and  demanded  classification  into  three  grades, 
each  group  to  receive  1,200,  1,800  and  2,400  lire  per  month, 
respectively.  As  these  rates  were  extortionate  and  entirely 
beyond  the  company's  ability  to  grant,  they  refused  the  de 
mand  and  the  men  struck. 

'  London  Times,  March  29,  1919. 

304 


Said  another: 

It  is  a  part  of  the  policy  of  labor  to  ask  for  a  share  in  the 
management.  They  make  an  undisguised  claim  over  the  con- 
trol of  industry.  They  make  increasing  demands  upon  the 
employers,  believing  that  if  the  employer  will  be  unable  to 
exist  under  these  new  conditions,  they  unhesitatingly  demand 
that  they  should  then  take  over  the  property.  Thus  the  labor 
demands  lead  inevitably  to  socialistic  control  over  property. 

And  further: 

The  claims  of  the  laborers  (on  Tramway  System  of  Rome) 
became  so  extreme  as  to  wages  and  other  matters  that  the 
expense  of  operation  made  the  tramway  unprofitable  at  the 
present  rate  of  fares.  The  only  solution  was  an  increase  in  the 
fares.  It  was  realized  that  if  they  were  raised  by  a  private 
company  there  would  be  such  opposition  to  it  as  to  make  it 
impossible. 

In  the  silk  industry 

it  was  explained  that  the  Italian  costs  were  40  per  cent  more 
than  those  of  Japan.  Consequently,  the  Italian  establish- 
ments had  lost  the  American  market  already  for  at  least  two 
years.  .  .  .  The  high  Italian  costs  were  largely  due  to  wages. 
In  March  there  had  been  a  rise  in  wages  of  20  per  cent.  Now 
there  was  a  demand  from  them  for  the  eight-hour  day  with 
the  same  rate  as  formerly  paid  for  ten  hours. 

The  Government,  it  has  been  claimed,^  has  been  without  \ 
a  poHcy;  it  has  drifted  or  has  veered  and  tacked  to  catch 
the  shifting  poHtical  breeze.  Some  things,  however,  the 
Government  has  done  to  allay  the  general  discontent. 
Important  among  these  is  the  political  pressure  brought 
to  bear  upon  employers  to  adopt  the  principle  of  a  mini- 
mum wage  and  of  an  eight-hour  day.  The  tendency  of  the 
minimum  wage  and  the  eight-hour  day,  however,  was  to 
increase  further  the  cost  of  living,  and  bread  riots  became 
more  violent.  Nor  did  such  a  movement  start  the  wheels 
of  industry  or  secure  raw  materials  and  coal.  Of  more 
direct  effect  was  the  decision  by  the  Government  to  fix 
the  price  of  bread  and  wheat,  and  to  distribute  3,500,000 
pairs  of  "national"  shoes  within  the  year.  A  card  system 
has  been  developed  for  distributing  the  supplies  of  wearing 
apparel,  by  means  of  which  750,000  pairs  of  shoes,  50,000 
meters  of  heavy  cotton-wool  goods,  71,000  meters  of  light 
cotton-wool  goods,  68,000  meters  of  flannels  are  already 

^  Amoroso,  Luigi:  Giornale  degli  Economisti  e  revisti  di  Statistica,  April,  1919, 
"La  Situazione  Economica." 

305 


in  distribution.  The  Minister  of  Industry  and  Commerce 
has  determined  to  continue  "on  his  own  account"  the 
manufacture  of  goods  in  forty  plants.  The  output  of 
these  plants  is  expected  to  reach  20,000,000  meters  of 
cloth.  Some  5,000,000  meters  have  already  been  put  on 
sale  at  less  than  market  price. ^  A  movement  is  also  being 
agitated  for  public  works  to  be  started  in  order  to  give 
employment. 

A  generous  act  of  Italy's  King  has  done  much  to  endear 
him  to  the  common  people  and  also  to  allay  discontent. 
He  has  given  to  the  state  for  distribution  among  the 
peasants  a  large  part  of  his  crown  lands.  This  generosity 
on  the  King's  part  will  no  doubt  find  a  response  among 
his  people  and  tend  to  make  them  more  tolerant  during 
this  trying  period. 

In  many  respects  the  labor  situation  in  Italy  resembles 
that  of  France.  There  is  the  sam.e  overwhelming  burden 
from  the  war,  the  same  temperament,  similar  radical 
influences,  an  energetic  and  radical  organized  minority, 
an  appeal  to  the  general  strike  for  quick  results,  a  following 
of  leaders  that  rise  in  a  crisis,  a  strong  trend  among  the 
unorganized  masses  toward  conservatism  and  serious 
consideration  of  problems,  dissensions  over  political  and 
religious  questions,  extravagant  demands  by  irresponsible 
leaders.  Italy,  however,  has  a  surplus  of  labor;  Italy 
lacks  natural  resources.  She  cannot  maintain  her  popula- 
tion from  her  own  efforts.  Foreign  loans,  avenues  for 
drawing  off  her  surplus  labor,  trade  relations  abroad 
are  essential  to  the  welfare  of  all,  and  especially  to  the 
workpeople.  The  restlessness  among  her  working  popula- 
tion, especially  in  the  industrial  centers,  can  be  allayed 
only  by  returning  prosperity.  This  basic  fact  is  now 
coming  clear  in  the  minds  of  industrial  leaders.  As  in 
France,  it  is  the  idle  workman  who  is  dangerous.  Dis- 
rupting influences,  from  Germany  or  elsewhere,  will  not 
likely  make  great  headway  among  Italian  workmen  who 
are  employed. 

In  Italy,  politics  had  already  been  interwoven  with 
industrial  problems.  As  has  been  said,  only  a  small  per- 
centage of  laborers  is  organized  into  unions;  but  the 
extreme  radicals  control  them.  They  arc  the  ones  who 
make  the  speeches,  threaten,  and,  when  striking,  resort  to 
violence.    Thus  they  frighten  the  general  body  of  peaceful 

■  Commerce  Reports,  September  6,  1919. 

306 


workers  into  joining  them  in  any  crisis;  and  they  succeed 
in  intimidating  the  employers.  In  recent  months  the 
absorbing  question  in  Italy  has  been  her  attitude  to  the 
proposed  terms  of  peace.  Taking  advantage  of  this 
situation,  the  extremists  have  increased  their  demands  and 
to  avoid  a  general  strike  while  the  Peace  Conference  was 
in  session  at  Paris,  the  Government  brought  pressure  to 
bear  on  employers  to  meet  the  demands  of  labor.  Political 
and  other  disturbing  and  disquieting  influences  would 
lose  much  of  their  force  among  Italian  laborers  if  finances, 
raw  materials,  and  food  were  supplied. 


307 


CHAPTER  XX 

THE  INTERNATIONAL  POLITICAL  LABOR 
MOVEMENT 

§  1.     International    Labor    Movement    before    the 

War 

Political  activity  in  behalf  of  labor  interests  became 
international  through  socialistic  propaganda.  It  was 
this  spirit  of  propaganda  that  inspired  the  Communist 
Manifesto  of  1848,  which  launched  the  crusade  of  Karl 
Marx  and  Frederick  Engels.  In  the  previous  year  an 
international  organization,  called  the  Communist  League, 
had  been  made  in  London.  The  reaction  to  this  radical 
movement  was  so  successful,  however,  that  the  League 
was  overwhelmed  and  disappeared. 

To  an  exhibition  held  in  London,  1862,  came  a  deputa- 
tion of  French  workingmen.  They  met  with  representa- 
tives of  English  workers  and  laid  the  foundation  for  the 
International  Association  of  Workingmen.  Karl  Marx 
drafted  the  constitution,  radical  and  socialistic  in  charac- 
ter, which  was  adopted  at  a  meeting  in  Geneva,  1866. 
A  third  congress  at  Brussels,  1868,  included  delegates  from 
England,  France,  Germany,  Belgium,  Italy,  Spain,  and 
Switzerland.  The  Franco-German  War  interrupted  its 
activities  for  a  time,  but  a  congress  met  at  The  Hague, 
1872,  and  another,  the  last,  at  Geneva,  1873.  In  its  day 
it  created  considerable  sensation,  and  continental  govern- 
ments were  somewhat  alarmed  at  the  doctrines  preached. 
Its   actual  achievements,  however,  were  small. 

Then  followed  a  period  of  reaction  and  inactivity, 
until  in  1889,  on  the  centennial  anniversary  of  the  French 
Revolution,  there  assembled  in  Paris  an  International 
Socialist  Congress.  This  congress  was  engineered  by  the 
French  Socialist  parties.  It  quickly  divided  into  two 
groups,  one  f(jllowing  the  Marx  model  and  called  the  Marx- 
ist Congress,  and  the  other,  an  opportunist  group,  called 
the  Possibilist  Congress.  Later  meetings  of  these  groups 
were  hehl,  Brussels  1891,  Zurich  1893,  London  1896,  and 
Paris  1900.     It  was  at  the  Paris  Congress,  1900,  that  a 

308 


new  central  organization  was  formed  called  the  Inter- 
national Socialist  Bureau,  which  still  exists  as  the  chief 
international  machinery  for  political  activity  in  spreading 
socialistic  doctrines.  Its  requirements  for  affiliation  are 
sufficiently  suggestive  of  the  principles  for  which  it  stands. 

"(1)  All  associations  which  adhere  to  the  essential  prin- 
ciples of  socialism;  socialization  of  the  means  of  production 
and  distribution;  international  union  and  action  of  the 
workers;  conquest  of  public  powers  by  the  proletariat 
organized  as  a  class  party. 

"  (2)  All  constituted  organizations  which  accept  the 
principle  of  class  struggle  and  recognize  the  necessity  for 
political  action  (Legislative  and  Parliamentar}^)  but  do  not 
participate  directly  in  the  political  movement." 

As  has  been  said,  the  socialists  are  primarily  concerned 
with  political  action;  the  socialist  movement  is  a  political 
movement.  Incidentally,  industrial  action  may  have 
been  encouraged  for  a  definite  purpose,  as  when,  through 
the  International  Association  of  Workingmen,  the 
British  Trades  Unions  made  substantial  contributions  to 
the  French  and  German  strike  funds.  In  France,  Italy, 
and  Belgium,  today,  the  organized  labor  movement  very 
largely  finds  expression,  politically,  through  a  socialist 
organization.  This  is  not  true  of  England,  where  the 
organized  labor  movement  has  been  unique  in  remaining 
chiefly  industrial. 

British  labor  first  found  political  representation  through 
the  established  political  organizations.  In  1874,  long 
before  there  was  an  official  labor  party,  Thomas  Burt 
and  Alexander  Macdonald  were  "returned."  It  was, 
of  course,  in  the  Liberal  Party  that  labor  found  most 
sympathy,  but  it  worked  directly  through  its  own  Labor 
Representation  League.  Socialistic  organizations  began 
in  England  in  the  early  eighties.  The  Democratic  Federa- 
tion was  formed  in  1881,  subsequently  split  into  two 
sections,  one  following  William  Morris,  and  calling  itself 
the  Socialist  League,  the  other  following  H.  M.  Hyndman, 
and  known  as  the  Social  Democratic  Federation.  The 
Fabian  Society  was  organized  in  1884,  representing  the 
"intellectuals."  All  of  these  organizations  found  voice 
in  the  Trades  Union  Congress. 

Lack  of  success  caused  the  opening  of  a  new  campaign 
under  the  leadership  of  J.  KeirHardie,  a  representative  of 

309 


the  Ayrshire  miners,  who  declared  at  a  meeting  of  the 
Trades  Union  Congress  in  1887  for  the  political  independ- 
ence of  labor.  To  this  cause  he  devoted  the  rest  of  his 
life.  Two  years  after  this  declaration  came  the  great 
Dock  Strike  of  1889,  On  top  of  this  came  a  stimulation 
through  the  lectures  by  Henry  George  on  Single  Tax 
and  Land  Reform.  In  1893  there  was  called  a  meeting 
of  representative  social  and  labor  bodies  at  Bradford 
over  which  J.  Keir  Hardie  presided.  Prominent  also 
at  this  time  were  John  Burns  and  J.  Havelock  Wilson. 
From  this  meeting  came  the  Independent  Labour  Party. 

"The  Conference  declared:  That  the  object  of  the  In- 
dependent Labour  Party  shall  be  to  secure  the  collective 
ownership  of  all  the  means  of  production,  distribution,  and 
exchange,  and  its  immediate  aims  independent  labor  repre- 
sentation on  all  legislative,  governing,  and  administrative 
bodies."^ 

This  is  still  an  active  political  party.  In  1916  it  had 
nearly  800  branches  and  60,000  members.  It  is  not, 
however,  as  will  be  shown,  the  real  political  backbone  of 
the  British  labor  movement. 

Success  did  not  attend  the  early  steps  of  the  Inde- 
pendent Labour  Party;  its  representation  fell  off  sharply 
in  the  1895-1900  Parliament.  This  lack  of  success  led 
to  a  broadening  of  the  political  movement.  At  a  Trades 
Union  Congress  in  1899  a  resolution  was  passed  "to 
invite  the  co-operation  of  all  Co-operative,  Socialistic, 
Trade  Union,  and  other  working-class  organizations  to 
jointly  co-operate  on  lines  mutually  agreed  upon  in  con- 
vening a  Special  Congress  of  representatives  from  such  of 
the  above-named  organizations  as  may  be  willing  to  take 
part  to  devise  ways  and  means  for  the  securing  of  an 
increased  number  of  Labour  Members  to  the  next  Par- 
liament." 

In  accordance  with  this  resolution  there  met  in  London 
a  conference  of  delegates  on  February  27,  1900,  which  drew 
up  a  constitution  forming  the  Labour  Representation 
Committee.  It  was  this  organization  that  was  pre- 
dominant in  the  British  political  labor  movement  from 
that  time  until  by  the  adoption  of  a  new  constitution  in 
February,  1918,  it  became  the  Labour  Party.  Today 
this  is  the  strongest  British  labor  political  organization. 

'  Labour  Yearbook,  1910,  p.  'MFy. 

310 


It  was  this  political  organization  of  workers  that  stood 
solidly  for  legislative  enactment  to  overthrow  the  prece- 
dent in  the  Taff  Vale  Case,  1902,  which  held  a  striking 
union  for  damages  under  a  broken  work  contract,  that 
opposed  with  equally  successful  stubbornness  the  Osborne 
decision,  1910,  which  prevented  the  use  of  union  funds 
for  political  purposes.  It  is  this  party  that  forms  the 
moderate  center  in  labor  politics. 

Various  congresses  of  labor  unions  of  a  limited  inter- 
national character,  such  as  the  International  Miners' 
Federation,  the  International  Textile  Workers'  Federation, 
had  met  intermittently  before  the  formation  of  the 
International  Trade  Uijion  Secretariat  in  1901.  Until 
recently  this  has  never  been  a  labor  organization  strong 
enough  to  be  compared  with  that  of  the  Socialists.  Its 
purpose  was  clearly  defined  at  a  Conference  held  in 
Dublin,  1903,  which  showed  it  to  be  not  much  beyond  an 
international  labor  men's  news  service  bureau.  Strike 
statistics  and  similar  data  are  published  annually  by  it. 
In  1912,  it  is  claimed,  the  number  of  members  affiliated 
with  the  International  was  7,395,361,^  and  that  it  em- 
braced the  trade  union  movements  of  twenty-one 
countries  —  in  fact,  all  countries  with  any  considerable 
trade  union  activity  except  Australia,  Bulgaria,  and 
Argentina.  For  1916,  claim  was  made  for  a  membership 
of  15  millions.^ 

This  International  Federation  of  Trades  Unions,  as 
it  is  now  called,  included  before  the  war  the  French  Con- 
federation Generale  du  Travail,  the  American  Federation 
of  Labor,  the  General  Commission  of  German  Unions, 
the  General  Federation  of  Trades  Unions  of  Great  Britain 
(not  the  British  Trades  Union  Congress),  and  many  other 
trade  union  bodies  throughout  Europe.  It  was  from  this 
organization,  by  a  proposal  emanating  from  the  American 
Federation  of  Labor,  that  the  "suggestion"  was  first  made 
to  have  labor  representatives  at  the  Peace  Conference. 
But,  as  has  been  shown,  the  task  of  bringing  these  labor 
unions  together  upon  some  definite,  agreed  policy  and 
joining  with  them  the  great  bulk  of  socialist  organizations 
did  not  come  down  from  this  super  organization  but  up 
from  the  British  trade  union  movement. 

It  is  necessary  to  keep  this  background  of  development 
in  mind,  not  only  to  understand  the  attitude  of  labor 

1  Labour  Yearbook,  1916,  pp.  426-27. 

311 


during  the  war,  but  also  to  appreciate  the  existing  situa- 
tion. Everywhere  your  Commission  found  that  in  the 
opinion  of  manufacturers,  "politics,"  in  its  bad  sense, 
was  a  part  of  the  great  labor  problem. 

"Trade  unions  are  being  misled  by  politicians,"  said  one 
prominent  Englishman  interviewed  by  us.  "They  are  the 
most  irresponsible  leaders,  since  they  can  throw  responsi- 
bility for  mistakes  or  omissions  on  the  Government,  and  can 
promise  liberally  what  they  know  to  be  impossible." 

Said  another: 

"At  present  there  is  far  too  much  reckless  and  injurious 
talk  by  politicians  in  the  government  services  and  in  the 
trades  unions." 

The  development  in  England  is  of  peculiar  significance, 
first,  because  British  labor  has  assumed  a  leading  part  in 
the  present  international  movement,  and,  second,  because 
in  contrast  with  American  experience  this  is  a  political 
labor  movement  and  in  contrast  with  the  experience  on 
the  continent  it  is  a  trade  union,  not  a  socialist,  movement. 
It  is  now  proposed  to  show  how  this  British  political 
labor  movement  set  about  consolidating  opinion  at  home 
and  formulating  a  program,  then  how  it  reached  out  to 
unify  and  specify  the  aims  of  Inter-Allied  Labor,  and, 
with  this  accomplished,  how  it  launched  a  "political  offen- 
sive" against  the  Central  Powers.  Incidentally  there 
will  be  described  the  entrance  of  political  action  more  and 
more  into  industrial  problems.  The  culmination  of  this 
new  movement,  as  has  been  suggested,  was  the  Inter- 
national Labor  Conference  in  connection  with  the  Paris 
Peace  Conference,  which  will  be  taken  up  in  detail. 

§  2.     The    International    Labor   Movement    in   the 

War 

In  every  country  there  has  been  a  radical  element 
opposed  to  war.  In  1913  the  International  Socialist 
Organization  made  protest  against  the  larger  powers 
being  drawn  into  the  Balkan  imbroglio.  In  1914  there 
were  demurrers  in  Germany,  in  France,  in  England. 
The  Socialist  Party  in  Belgium  stood  by  the  Government; 
opposition  was  individual.  Throughout  the  struggle,  too, 
there  has  been  this  nucleus  of  pacifists  in  the  labor  group, 
the  radical  socialist  part. 

.312 


Labor,  however,  found  a  place  in  the  war  governments. 
In  England  the  Asquith  Ministry  sought  the  co-operation 
of  the  trade  union  members  of  Parliament  and  selected 
for  important  offices  such  men  as  Arthur  Henderson, 
Roberts,  and  Brace.  Many  more  came  in  under  Lloyd- 
George,  conspicuously  J.  R.  Clynes,  John  Hodge,  and 
G.  N.  Barnes.  In  France  there  was  M.  Albert  Thomas, 
and  in  Belgium,  M.  Vandervelde.  What  labor  had  not 
achieved  by  ballot  was  secured  by  appointment. 

Under  the  drastic  demands  of  war  the  governmental 
control  increased;  regulations  became  ever  more  stringent. 
It  was  inevitable  that  labor  must  yield  many  things. 
As  has  been  shown,  that  bundle  of  rules  and  regulations 
which  British  trade  unions  had  struggled  so  long  to 
secure,  having  to  do  with  length  of  day,  output,  and 
working  conditions,  was  discarded  under  the  promise 
of  restoration  after  the  war.  It  was  agreed,  also,  except 
for  the  miners,  that  differences  should  be  settled  by 
arbitration  and  not  by  strikes.  In  other  words,  for  the 
period  of  the  war  a  truce  was  declared  between  employers 
and  employed.  It  should  be  noted,  however,  that  labor's 
position  has  been  so  powerful  during  the  war  that  it  has 
received  practically  what  it  demanded. 

What,  then,  had  become  of  that  splendid  array  of 
principles  put  forth  by  the  international  socialist  organi- 
zation.^ Labor,  for  the  most  part,  in  every  country  had 
stood  behind  its  Government;  labor  was  fighting  itself. 
And  in  the  midst  of  this  struggle  there  met,  in  1915  the 
neutral  Socialists  at  Copenhagen,  the  Socialists  of  the 
Central  Powers  at  Vienna,  and  the  Socialists  of  the  Allies 
at  London,  and  each  conference  reiterated  almost  identi- 
cally the  same  doctrine.  The  Allied  Socialists  justified 
their  war  stand  on  the  grounds  that  Germany  had  invaded 
Belgium  and  France  and  threatened  the  existence  of 
independent  nationalities.  The  Socialists  of  Germany 
and  Austria  spoke  only  In  general  principles. 

The  International  Socialist  Bureau  continued  some 
activity  from  its  new  headquarters  at  The  Hague.  Noth- 
ing except  an  interchange  of  views  came  of  It.  After 
the  Russian  revolution,  1917,  the  International  moved  to 
Stockholm.  A  Dutch-Scandinavian  Committee,  with 
Branting,  the  leader  of  the  Swedish  Socialist  Party,  at 
the  head,  was  formed.  The  "Stockholm  project"  was 
launched,  but  the  British  and  French  would  not  at  first 

313 


consent  to  take  part.  It  was  necessary  for  the  Allies 
first  to  know  where  they  themselves  stood  before  their 
co-operation  could  be  secured  for  an  international  con- 
ference; they  would  not  be  stampeded.  Later  when  it 
was  decided  to  send  delegates  the  British  Government 
refused  them  passports. 

The  first  real  attempt  of  allied  labor  to  get  together  on 
a  practical  working  basis  was  at  the  Congress  in  London, 
August,  1917.  Here  were  representatives  from  eight 
allied  nations,  including  Belgium,  France,  Russia,  and 
England.  The  important  point  to  be  noted  is  that  this  is 
a  political  trade  union  movement,  not  a  Socialist  move- 
ment. The  latter  had  failed;  it  was  now  left  to  trade 
unions  to  try  their  skill.  The  first  attempt  was  a  failure. 
No  agreement  could  be  reached  either  on  a  statement  of 
principles  or  on  a  statement  of  war  aims. 

Not  daunted  by  this  first  experiment,  after  a  preliminary 
discussion  in  Paris  among  the  leaders,  another  Congress 
was  called  for  London,  February,  1918.  To  this  the 
American  Federation  of  Labor  was  invited  but  no  dele- 
gates attended.  Russia  also  was  absent;  the  Brest- 
Litovsk  negotiations  were  then  on.  The  leading  spirit 
in  this  conference  was  undoubtedly  A'Ir.  Henderson,  who 
had  been  a  government  agent  to  Russia,  who  had  been 
refused  a  passport  to  Stockholm,  and  who  had  resigned 
from  the  war  cabinet.  It  was  a  labor  and  Socialist  con- 
gress, with  the  trade  union  element  in  control. 

This  was  in  every  way  an  important  conference.  The 
character  of  leadership  in  organized  labor  for  the  rest  of 
the  war  was  there  determined;  from  it  came  the  specific 
declaration  of  the  aims  for  which  labor  was  fighting  and 
the  conditions  which  they  would  strive  after  the  war  to 
realize.  It  marks  a  distinct  victory  by  the  trade  union 
movement  over  the  Socialist  movement  and  the  taking 
over  by  the  trade  unions  of  a  large  part  of  the  socialistic 
program.  From  this  time  on,  until  another  movement 
begins,  labor's  political  and  industrial  aims  and  methods 
are  fused.  One  cannot  understand  the  British  labor 
situation  today  without  this  knowledge. 

These  aims  embodied  in  the  resolutions  passed  at  this 
Inter-Allicd  conference  arc  so  significant  in  themselves 
as  to  justify  a  summary.  Furthermore,  it  is  to  these  aims 
that  British  labor  has  clung  with  all  of  its  world-famed 
bulldog   tenacity.     They   were   reaffirmed    in    the    midst 

314 


of  the  great  German  1918  drive,  and  to  them  was  added 
a  reconstruction  program.  They  are  today  the  program 
of  a  majority  of  British  laboring  men.  They  have,  in 
part,  found  expression  in  the  Treaty  of  Peace  and  in  the 
League  of  Nations.  With  them  British  industry  must 
cope.  On  the  basis  of  them  British  labor  is  willing  to 
meet  the  world  in  trade.  They  form  the  British  labor 
movement's  politico-industrial  program  and  British  labor 
proposes  to  teach  them  to  all  working  classes  of  the  world. 

The  main  points  of  the  significant  resolution  passed  at 
the  Inter-Allied  Congress  in  London,  February  20-24, 
1918,  may  be  briefly  summarized  as  follows: 

1.  While  not  definitely  allocating  the  causes  of  the 
war,  the  Congress  declared  it  would  fight  to  remove 
those  causes  which  underlie  modern  capitalistic  society 
and  especially  "the  aggressive  policy  of  Colonialism  and 
Imperialism." 

2.  The  world  can  be  made  safe  for  democracy  only 
by  establishing  throughout  the  world  the  right  of 
peoples  to  self-determination  by  means  of  a  League  of 
Nations.  "The  Conference  expresses  its  agreement 
with  the  propositions  put  forward  by  President  Wilson." 

3.  The  supreme  right  of  each  people  to  determine  its 
own  destiny  must  be  applied  in  settling  questions  of 
reparation,  restitution,  and  territorial  readjustments. 

4.  In  economic  relations  it  declares: 

(a)  for  the  opening  without  hindrance  of  all  lines  of  marine 
communication ; 

(b)  against  an  economic  war,  by  means  of  tariff  or  mono- 
polism, or  military  and  fiscal  alliances; 

(c)  for  conservation  of  resources  at  the  same  time  with  their 
speedy  development; 

(d)  for  an  international  agreement  for  the  enforcement  in 
all  countries  of  the  legislation  on  factory  conditions,  a  maxi- 
mum eight-hour  day,  the  prevention  of  "sweating"  and 
unhealthy  trades  necessary  to  protect  workers  against  ex- 
ploitation and  oppression,  and  the  prohibition  of  nightwork 
by  women  and  children; 

(e)  for  the  principle  of  "no  cake  for  anyone  until  all  have 
bread,"  to  be  secured  by  continued  government  control  and 
a  pooling  of  international  resources. 

315 


(J)  for  the  prevention  of  unemployment  of  demobilized 
soldiers  and  of  displaced  civilians  by  temporary  relief  and  by 
government  enterprises. 

(g)  for  an  international  congress  of  labor  and  socialist 
movements  to  remove  misunderstandings  and  to  work  for 
freedom  of  propaganda. 

The  significance  of  these  resolutions  is  self-evident.  It 
may  be  vv^ell,  however,  to  call  attention  to  the  fact  that 
many  of  them  have  been  carried  forward  through  the 
peace  parleys.  One  should  remember  also  that  these 
were  framed  by  an  Inter-Allied  Congress  during  the 
darkest  days  of  the  war.  While  there  is  enough  radicalism 
to  hold  together  the  socialist  groups,  there  is  still  a  moder- 
ateness about  them  to  appeal  to  the  more  conservative 
laboring  man. 

Of  more  immediate  and  vital  importance,  however,  in 
the  industrial  situation  today  is  the  program  for  recon- 
struction which  was  set  forth  in  a  resolution  adopted  by 
the  British  Labour  Party  in  a  meeting  at  Nottingham, 
January  23-25,  1918,  The  main  points  are  summarized 
below: 

1.  "The  view  of  the  Labour  Party  is  that  what  has 
to  be  reconstructed  after  the  war  is  not  this  or  that 
Government  Department,  or  this  or  that  piece  of 
social  machinery,  but,  so  far  as  Britain  is  concerned, 
society  itself." 

2.  The  new  society  is  to  be  built  up  "on  a  delib- 
erately planned  co-operation  in  production  and  dis- 
tribution for  the  benefit  of  all  who  participate  by  hand 
or  by  brain,"  "on  a  systematic  approach  towards 
a  healthy  equality  of  material  circumstances  for  every 
person  born  into  the  world,"  "in  industry  as  well  as 
in  government,  on  that  equal  freedom,  that  general 
consciousness  of  consent,  and  that  widest  possible 
participation  in  power,  both  economic  and  political, 
which  is  characteristic  of  Democracy." 

3.  "The  Four  Pillars  of  the  House  that  we  propose 
to  erect,  resting  upon  the  common  foundation  of  the 
democratic  control  of  society  in  all  its  activities,  may 
be  termed,  respectively: 

(a)  The  Universal  Enforcement  of  the  National  Minimum; 

{b)   The  Democratic  Control  of  Industry; 

(f)    The  Rcvcjlutifjn  in  National  Finance;  and 

{d)  The  Surplus  Wealth  for  the  Common  Good."  ' 

'  Cf.  "I>abour  and  l"hc  New  Social  Order,"  p.  12. 

316 


Behind  this  poHtical  program  there  stand  today  such 
labor  leaders  as  Arthur  Henderson,  J.  H.  Thomas,  J.  R. 
Clynes,  J.  Ramsay  MacDonald,  and  Sidney  Webb. 
Among  them  does  not  occur  the  name  of  a  newer,  ener- 
getic, radical  leader,  Robert  Smillie,  president  of  the 
Lanarkshire  Miners'  Union  (Scotland),  president  of  the 
Miners'  Federation  of  Great  Britain  (800,000  members), 
and  chairman  of  the  Triple  Alliance  of  Railwaymen, 
Transport  Workers,  and  Miners.  He  is  spokesman  for 
the  extremists  and  for  the  "rank  and  file,"  and  probably 
is  the  best  exponent  of  industrial  action  for  both  political 
and  economic  control.  His  following  is  strong,  inde- 
pendent, aggressive,  domineering.  It  is  not  willing  to 
wait  for  the  success  of  the  step-by-step  movement;  it 
does  not  endorse  that  part  of  the  moderate  Nottingham 
resolutions  which  reads: 

"We  do  not,  of  course,  pretend  that  it  is  possible,  even 
after  the  drastic  clearing  away  that  is  now  going  on,  to  build 
society  anew  in  a  year  or  two  of  feverish  'Reconstruction.' 
What  the  Labour  Party  intends  to  satisfy  itself  about  is  that 
each  brick  that  it  helps  to  lay  shall  go  to  erect  the  structure 
that  it  intends  and  no  other." 

The  political  labor  element  led  by  Smillie  is  for  feverish 
reconstruction.  The  activities  of  the  Triple  Alliance 
described  above  mark  the  advance  of  this  radical  element. 

The  passage  that  states  most  compactly  the  issues  of 
the  Labour  Party  program  is  quoted  below: 

"But  unlike  the  Conservative  and  Liberal  Parties,  the 
Labour  Party  insists  on  Democracy  in  industry  as  well  as  in 
government.  It  demands  the  progressive  elimination  from 
the  control  of  industry  of  the  private  capitalist,  individual  or 
joint-stock;  and  the  setting  free  of  all  who  work,  whether  by 
hand  or  by  brain,  for  the  service  of  the  community,  and  of  the 
community  only.  And  the  Labour  Party  refuses  absolutely 
to  believe  that  the  British  people  will  permanently  tolerate 
any  reconstruction  or  perpetuation  of  the  disorganization, 
waste,  and  inefficiency  involved  in  the  abandonment  of 
British  industry  to  a  jostling  crowd  of  separate  private 
employers,  with  their  minds  bent,  not  on  the  service  of  the 
community,  but  —  by  the  very  law  of  their  being  —  only  on 
the  utmost  possible  profiteering.  What  the  nation  needs  is 
undoubtedly  a  great  bound  onward  in  its  aggregate  produc- 
tivity. But  this  cannot  be  secured  merely  by  pressing  the 
manual  workers  to  more  strenuous  toil,  or  even  by  encouraging 

317 


the  "Captains  of  Industry"  to  a  less  wasteful  organization  of 
their  several  enterprises  on  a  profit-making  basis.  What  the 
Labour  Party  looks  to  is  a  genuinely  scientific  reorganization 
of  the  nation's  industry,  no  longer  deflected  by  individual 
profiteering,  on  the  basis  of  the  Common  Ownership  of  the 
Means  of  Production;  the  equitable  sharing  of  the  proceeds 
among  all  who  participate  in  any  capacity  and  only  among 
these,  and  the  adoption,  in  particular  services  and  occupa- 
tions, of  those  systems  and  methods  of  administration  and 
control  that  may  be  found,  in  practice,  best  to  promote,  not 
profiteering,  but  the  public  interest."^ 

A  further  point  is  worthy  of  notice.  There  is  a  firm 
stand  taken  on  the  question  of  nationaUzation. 

"The  Labour  Party  stands  not  merely  for  the  principle  of 
the  Common  Ownership  of  the  Nation's  land,  to  be  applied 
as  suitable  opportunities  occur,  but  also,  specifically,  for  the 
immediate  Nationalization  of  Railways,  Mines,  and  the  pro- 
duction of  Electrical  Power.  .  .  .  The  Railways  and  Canals, 
like  the  Roads,  must  henceforth  belong  to  the  public,  and  to 
the  public  alone." 

In  the  same  category  are  Health  and  Life  Insurance. 

There  is  no  specific  single  method  advocated  by  which 
these  objects  are  to  be  achieved.  Obviously,  however, 
the  existing  government  machinery  is  assumed  to  con- 
tinue, even  though  its  control  is  to  pass  over  to  labor. 
A  very  large  part  of  its  reconstruction  program  is  to  be 
the  result  of  legislation;  for  example,  "the  revolution  in 
national  finance"  is  a  taxation  of  capital,  a  "steeply 
graduated  income  tax,"  the  Factory,  Mines,  Railways, 
Shops,  Merchant  Shipping  and  Truck  Acts,  and  the  Acts 
on  Public  Health,  Housing,  Education,  and  Minimum 
Wage  are  all  legislative  acts.  To  this  extent,  and  further, 
the  method  is  one  of  political  action.  The  "step-by-step" 
movement  is  in  the  main  a  political  labor  movement, 
that  is,  an  advocating  of  political  action.  This  is  the 
moderate  center  of  the  British  Labour  Party. 

The  British  Labour  Party  itself,  and  the  Inter-Allied 
Congress,  especially,  behind  these  resolutions,  are  com- 
posed of  many  discordant  elements.  It  is  remarkable 
that  agreement  was  so  far  secured,  for  beyond  them  is 
wide  divergence  in  aims,  purposes,  and  methods.  There 
are   local    and    mcjrc   general   organizations   that   endorse 

'  Sec  Kellogg  and  Gleason:  "British  Labour  and  the  War,"  pp.  382-83. 

318 


sabotage,  strikes,  "ca'canny"  methods, — all  forms  of 
industrial  action.  Pressure  of  circumstances,  such  as 
the  continued  high  cost  of  living,  might  in  a  brief  time 
squeeze  a  majority  out  of  the  moderate  "center"  into  the 
radical  "left."  British,  French,  and  Italian  experience 
since  the  armistice  has  shown  frequently  a  quick  resort 
to  direct  Industrial  action. 

The  conclusion  clearly  is  that  in  this  new,  unified  move- 
ment, international  in  character,  there  is  a  combination  of 
the  political  and  industrial  methods.  In  order  to  swing 
enough  radicals  from  the  Left  and  conservatives  from  the 
Right  to  make  up  a  moderate  Center  majority,  such  a 
combination  was  necessary.  So  successfully  was  It  done 
that  neither  the  radicals  under  Robert  Smillie's  leadership 
nor  the  pure  Trade  Unionists,  like  Hughes  of  Australia, 
nor  the  German-hating  seamen's  unions,  nor  the  red-dyed 
Socialists  could  break  it  up.  It  was  this  compromise 
policy  that  carried  the  day  In  time  of  war,  that  was  re- 
endorsed  in  the  more  favorable  military  situation  of 
September,  1918,  and  that  most  potently  influenced  the 
Peace  negotiations. 


§  3.     The  International  Labor  Movement  and  the 
Peace  Conference 

The  Inter-Allied  Labor  and  Socialist  Congress  had  not 
neglected  to  equip  itself  with  the  proper  machinery  of 
organization  to  carry  on  its  work.  A  committee  of  three 
was  appointed  {a)  "to  secure  from  all  the  Governments 
a  promise  that  at  least  one  representative  of  Labour  and 
Socialism  will  be  included  in  the  official  representation 
at  any  Government  Conference,"  and  (b)  "to  organize  a 
Labour  and  Socialist  Conference,"  international  in 
character  and  Including  the  Central  Powers,  for  the 
purpose  of  discussing  points  of  view.  The  members  of 
this  committee  were  A'l.  Albert  Thomas  (France),  M. 
Emile  Vandervelde  (Belgium),  and  Mr.  Arthur  Henderson 
(Great  Britain). 

It  took  some  time  after  the  unexpectedly  sudden  collapse 
of  the  German  military  organization  to  recover  and  get 
under  way.  A  distraction  to  British  labor  occurred  In 
the  December  election.  Preliminary  arrangements  were 
finally  made  for  an  international  conference  of  trade 
unions  and  of  Socialists  In  Berne,  Switzerland,  for  January 

319 


27,  1919.  Delays  arose  that  necessitated  postponement 
until  February  3d  to  5th,  when  the  Socialist  International 
and  the  Trade  Union  International  met  as  separate  or- 
ganizations but  closely  co-operating.  The  meetings  do  not 
appear  to  have  had  great  significance.  American  and 
Belgian  labor  delegates  refused  to  attend  because  delegates 
from  the  Central  Powers  were  invited,  while  there  was 
still  technically  a  state  of  war. 

The  chief  item  reported  from  the  International  Socialist 
Congress  was  a  resolution  to  the  effect  that  the  League 
of  Nations,  to  be  formed,  should  have  representatives 
from  the  Parliaments  and  not  from  the  Cabinets  of  States. 
There  was  otherwise  an  endorsement  of  the  League  of 
Nations  idea.^  This  meeting  also  marks  the  resuscitation 
of  the  International  Socialist  Bureau. 

The  InternationalTrade  Union  Congress  opened  on  Feb- 
ruary 5th,  with  fifty-one  deputies  from  fourteen  countries. 
The  main,  tangible  achievement  of  the  trade  union 
conference  was  the  drafting  of  a  labor  charter.  Since 
these  so-called  "demands"  were  largely  met  in  the  report 
of  the  Commission  on  International  Labour  Legislation 
working  with  the  Peace  Conference,  their  significance  is 
not  great.    The  points  of  importance  are: 

1.  The  immediate  establishment  of  a  League  of  Nations. 

2.  A  charter  of  labor  legislation  designed  to  equalize  in- 
dustrial conditions  in  every  country,  and  to  remove  as 
far  as  possible  the  economic  antagonism  of  nations  which 
leads  to  war. 

3.  A   policy   looking  toward   an   understanding   with   the 
revolution  in  Central  Europe  and  Russia. 

4.  The  reconstitution  of  a  strong  international  organization. 

Since  the  Intcr-Allicd  Congress  in  London,  February, 
1918,  there  had  been  persistent  pressure  for  labor  repre- 
sentation at  the  World  Peace  Conference.  This  desire 
was  realized  when,  Saturday,  January  25th,  the  delegates 
to  the  Paris  Peace  Conference  resolved,  "that  a  Com- 
mission composed  of  two  representatives  apiece  from  the 
Five  Great  Powers  and  five  representatives  to  be  elected 
by  the  other  powers  represented  at  the  Peace  Conference 
be  appointed  to  inquire  into  the  conditions  of  employment 
from  ihc  intcrnali(;iial  aspect  and  to  consider  the  inter- 

>  The  Times,  February  8,  1919. 

320 


national  means  necessary  to  secure  common  action  on 
matters  affecting  conditions  of  employment,  and  to 
recommend  the  form  of  a  permanent  agency  to  continue 
such  inquiry  and  consideration  in  co-operation  with  and 
under  the  direction  of  the  League  of  Nations."^ 

Members  of  this  Commission  were  immediately  ap- 
pointed and  met  for  the  first  time  on  February  1st.  The 
work  of  this  Commission^  is  familiar  knowledge,  but 
attention  is  called  to  it  specifically  in  order  to  demonstrate 
that  as  a  result  of  their  labor  there  is  now  prepared  the 
machinery  in  the  International  Labor  Bureau  for  common 
international  political  action  in  the  interests  of  labor. 

The  report  falls  into  two  parts:  The  first  has  to  do 
with  the  International  Labour  Conference  that  is  to 
meet  "at  least  annually"  for  a  frank  and  free  discussion 
of  labor  problems.  The  first  of  these  conferences  is 
planned  to  be  held  at  Washington,  October  29,  1919. 
Agenda  is  already  prepared  for  it. 

The  second  proposal  is  for  an  International  Labor 
Office  to   be  established    at  the    seat   of   the   League  of 

^  Report  of  the  Commission  on  International  Labour  Legislation,  Paris,  p.  L 

2  The  Commission  was  composed  as  follows: 

United  States  of  America:  Mr.  Samuel  Gompers,  President  of  the  American 
Federation  of  Labor;  Hon.  E.  N.  Hurley,  President  of  the  American  Shipping 
Board.  (Substitutes:  Hon.  H.  M.  Robinson,  Dr.  J.  T.  Shotwell,  Professor  at 
Columbia  University.) 

The  British  Empire:  The  Rt.  Hon.  G.  N.  Barnes,  M.P.,  Member  of  the  War 
Cabinet.  (Substitute:  Mr.  H.  B.  Butler,  C.  B.,  Assistant  Secretary,  Ministry 
of  Labour.)  Sir  Malcolm  Delevigne,  K.C.B.,  Assistant  Under-Secretary  of 
State,  Home  OfHce. 

France:  Mr.  CoUiard,  Minister  of  Labour.  (Substitute:  Mr.  Arthur  Fon- 
taine, Counsellor  of  State,  Director  of  Labour.)  Mr.  Loucheur,  Minister  of 
Industrial  Reconstruction.  (Substitute:  Mr.  Leon  Jouhaux,  General  Secretary 
of  the  Confederation  Generale  du  Travail.) 

Italy:  Baron  Mayor  des  Planches,  Honorable  Ambassador,  Commissioner- 
General  for  Emigration;  Mr.  Cabrini,  Deputy,  Vice-President  of  the  Supreme 
Labour  Council.     (Substitute:     Mr.  Coletti.) 

Japan:  Mr.  Otchiai,  Envoy  Extraordinary,  Minister  Plenipotentiary  of 
His  Majesty  The  Emperor  of  Japan  at  The  Hague.  Mr.  Oka,  formerly  Director 
of  Commercial  and  Industrial  Affairs  at  the  Ministry  of  Agriculture  and  Com- 
merce. 

Belgium:  Mr.  Vandervelde,  Minister  of  Justice  and  of  State.  (Substitute: 
Mr.  La  Fontaine,  Senator.)  Mr.  Mahaim,  Professor  at  Liege  University, 
Secretary  to  the  Belgian  Section  of  the  Association  for  the  Legal  Protection  of 
Workmen. 

Cuba:  Mr.  De  Bustamante,  Professor  at  Havana  University.  (Substitutes: 
Mr.  Raphael  Martinez  Ortiz,  Minister  Plenipotentiary;  Mr.  De  Blanck,  Min- 
ister Plenipotentiary.) 

Poland:  Count  Zoltowski,  Member  of  the  Polish  National  Committee,  after- 
wards replaced  by  Mr.  Stanislas  Patek,  Counsellor  of  the  Court  of  Cassation. 
(Substitute:    Mr.  Francois  Sokal,  Director-General  of  Labour.) 

Czechoslovak  Republic:  Mr.  Benes,  Minister  for  Foreign  Affairs,  afterwards 
replaced  by  Mr.  Rudolph  Broz. 

321 


Nations,  that   Is,  at  Geneva,  Switzerland.      "It  will  be 

controlled  by  a  Governing  Body  of  24  members 

Like  the  Conference,  the  Governing  Body  will  consist  of 
representatives  of  the  Governments,  employers  and 
workpeople.  It  will  include  12  representatives  of  the 
Governments,  8  of  whom  will  be  nominated  by  the  States 
of  chief  industrial  importance,  and  the  remaining  12  will 
consist  of  six  members  nominated  by  the  employers' 
delegates  to  the  Conference,  and  six  nominated  by  the 
workers'  delegates." 

The  Labor  Commission  took  this  occasion  also  to  make 
a  pronouncement  of  what  are  called  "declarations  of 
principle  in  regard  to  matters  which  are  of  vital  importance 
to  the  labor  world."  As  they  now  stand  they  are  to  be 
incorporated  into  the  Treaty  of  Peace: 

"The  High  Contracting  Parties  declare  their  acceptance  of 
the  following  principles  and  engage  to  take  all  necessary  steps 
to  secure  their  realization  in  accordance  with  the  recommenda- 
tion to  be  made  by  the  International  Labour  Conference  as  to 
their  practical  application: 

1.  In  right  and  in  fact  the  labour  of  a  human  being  should 
not  be  treated  as  merchandise  or  an  article  of  commerce. 

2.  Employers  and  workers  should  be  allowed  the  right  of 
association  for  all  lawful  purposes. 

3.  No  child  should  be  permitted  to  be  employed  in  industry 
or  commerce  before  the  age  of  fourteen  years,  in  order 
that  every  child  may  be  ensured  reasonable  opportunities 
for  mental  and  physical  education. 

Between  the  years  of  fourteen  and  eighteen,  young 
persons  of  either  sex  may  only  be  employed  on  work 
which  is  not  harmful  to  their  physical  development  and 
on  condition  that  the  continuation  of  their  technical  or 
general  education  is  ensured. 

4.  Every  worker  has  a  right  to  a  wage  adequate  to  maintain 
a  reasonable  standard  of  life  having  regard  to  the 
civilization  of  his  time  and  country. 

5.  Equal  pay  should  be  given  to  women  and  to  men  for 
work  of  equal  value  in  quantity  and  quality. 

6.  A  weekly  rest,  including  Sunday,  or  its  equivalent  for  all 
workers. 

7.  Limitation  of  the  hours  of  work  in  industry  on  the  basis 
of  eight  hours  a  day  or  forty-eight  hours  a  week,  subject 
to  an  exception  for  countries  in  which  climatic  conditions, 
the  imperfect  development  of  industrial  organization,  or 

322 


other  special  circumstances  render  the  industrial  effi- 
ciency of  the  workers  substantially  different. 

The  International  Labour  Conference  will  recommend 
a  basis  approximately  equivalent  to  the  above  for 
adoption  in  such  countries. 

8.  In  all  matters  concerning  their  status  as  workers  and 
social  insurance,  foreign  workmen  lawfully  admitted  to 
any  country  and  their  families  should  be  ensured  the 
same  treatment  as  the  nationals  of  that  country. 

9.  All  States  should  institute  a  system  of  inspection  in 
which  women  should  take  part,  in  order  to  ensure  the 
enforcement  of  the  laws  and  regulations  for  the  protec- 
tion of  the  workers. 

It  is  well  at  this  point  to  note  one  phase  of  the  inter- 
national labor  movement  not  wholly  in  harmony  with 
the  majority  opinion.  The  seamen  were  opposed  to  the 
Nottingham  resolutions;  they  did  not  propose  to  have 
anything  to  do  with  the  German  workingmen  until  they 
were  properly  punished.  This  attitude  resulted  from 
the  fact  that  the  seamen  had  borne  the  brunt  of  the  sub- 
marine campaign.  They  were  thoroughly  embittered  by 
it.  They  objected  to  any  British  delegates  going  to  a 
conference  where  German  delegates  were  to  sit;  they 
refused  to  carry  Mr.  Arthur  Henderson  across  the  Channel. 
Their  activities  are  worth  attention  because,  contrary  to 
the  general  trade  union  movement  that  has  been  traced, 
they  stand  solidly  for  industrial  action.  Note  one  signifi- 
cant resolution  that  passed  the  International  Seafarers' 
Conference,  held  in  London,  February,  1919. 

"Resolved,  that  this  International  Seafarers'  Conference, 
to  ensure  to  seamen  of  all  nations  the  application  of  the 
minimum  wage  already  approved,  decide  to  retain  in  the 
harbors  the  ships  whose  owners  refuse  to  pay  that  minimum 
wage."  ^ 

The  London  Seafarers'  Conference  was  adjourned  on 
motion  to  meet  a  few  days  later  in  Paris.  Opposition 
had  already  developed  to  joining  with  the  Labor  Com- 
mission there  because  it  was  felt  that  the  seamen's 
problems  were  unique  and  not  understood  or  appreciated 
by  the  landsmen,  while  the  latter  would  be  greatly  in  the 
majority.  At  this  adjourned  meeting  in  Paris  it  was 
decided   to   have   no   connection  with   the   International 

*  Carried  unanimously. 

323 


Labor  Commission.  The  International  Union  of  Seamen, 
therefore,  stand  today  independent  of  other  international 
labor  organizations  and  in  favor  of  industrial  action  to 
attain  their  ends.  The  individual  seamen's  unions, 
nevertheless,  are  nationally  trying  to  legalize  the  minimum 
wage,  the  eight-hour  day,  and  to  standardize  by  means  of 
legal  enactment  the  conditions  of  employment. 

§  4,     Concluding  Summary 

In  a  broad  view  this  was  the  political  background  of  the 
situation  that  the  Commission  found  in  Europe.  Running 
like  a  purple  thread  through  the  industrial  unrest  was 
this  political  influence.  And  yet  so  closely  is  it  connected 
with  industrial  action  that  it  is  impossible  to  isolate  it 
definitely.  Every  industrial  activity  has  its  political 
phase.  Labor  leaders  were  achieving  political  preierment. 
W.  T.  Cramp,  of  the  National  Union  of  Railwaymen,  is 
reported  as  saying  at  the  June,  1918,  meeting: 

"The  position  [of  labor]  cannot  be  met  by  industrial  action 
alone.  The  incidence  of  taxation  and  many  other  problems 
must  be  fought  out  in  Parliament." 

Said  J.  H.  Thomas  to  the  Postal  Unions,  January  17,  1919: 

"I  want  to  see  the  political  machine  and  the  industrial 
machine  working  side  by  side.  I  want  to  see  a  strong  Labour 
Party  in  Parliament."^ 

And,  again,  the  same  leader  said  to  the  National  Union  of 
Railwaymen  on  February  9,  1919,  when  they  complained 
of  the  reactionary  character  of  the  coalition  government: 

"If  it  is  reactionary,  it  is  a  reflex  of  your  own  intelligence. 
In  a  democratic  country  where  men  and  women  can  exercise 
their  political  freedom,  it  is  madness  for  them  to  try  to  do  by 
industrial  action  what  their  own  intelligence  ought  to  have 
told  them  to  do  at  the  ballot  box." 

Labor  leaders  in  Europe,  and  in  Great  Britain  especially, 
have  learned  the  political  power  that  lies  in  industrial 
action.  There  is  great  political  power,  too,  in  the  very 
mass  of  the  labor  movement.  When  even  a  substantial 
part  of  the  five  and  a  half  millions  of  organized  British 
workingmen  can  be  swung  behind  a  political  demand 
the  effect  upon  the  attitude  of  government  officials  will 

'  The  Times,  l''cbruary  ISlli. 

.324 


be  tremendous.  Employers  will  find  a  pressure  by  the 
Government  for  granting  the  labor  demand.  There  is 
also  the  more  subtle  method,  largely  psychological  in 
character,  of  intimidation  by  means  of  industrial  demon- 
stration. Such,  for  instance,  is  the  "silent  strike"  in 
France  of  Labor  Day  (May  1st),  when  every  shop,  every 
factory,  every  bakery,  every  mill,  every  bank  was  closed; 
when  even  the  largest  hotels  were  turned  into  "help- 
yourself"  cafeterias,  and  when  guests  had  to  make  their 
own  beds,  if  they  were  made  at  all;  when  no  car  wheel 
turned,  no  bus,  taxi,  or  tram  ran  on  the  street,  throughout 
all  France,  for  the  sole  purpose  of  demonstrating  the 
essential  importance  of  labor  in  all  phases  of  modern  life. 
This  was  labor  "playing  politics." 

It  entered  the  international  phase  when  a  movement 
was  started  to  extend  such  a  "silent  strike"  throughout 
the  world  of  organized  labor  on  July  20th  and  21st.  The 
plan  was  a  failure  because  British  and  French  labor  would 
not  endorse  it,  but  it  did  materialize  in  a  small  way  in 
local  strikes  here  and  there  and  in  a  considerable  dis- 
turbance in  Italy,  The  important  fact  is,  however,  that 
such  ideas  are  in  the  minds  of  labor  agitators.  It  is 
labor  "playing  politics"  but  with  an  organized  machinery 
of  great  strength  for  good  or  ill.  European  employers 
have  reason  not  only  to  feel  irritation  at  these  nagging 
methods,  but  also  to  have  a  bit  of  the  "fear  of  God"  in 
their  hearts  because  of  what  may  happen  if  labor  should 
under  stress  of  circumstances  swing  too  far  to  the  radical 
Left. 

British  employers  interviewed  by  the  Commission  often 
complained  of  the  fact  that  pressure  was  brought  to  bear 
upon  them  by  the  Government  to  accept  the  demands  of 
workmen.  The  Whitley  Scheme,  for  example,  was 
adopted  by  some  employers,  under  Government  pressure, 
but  with  great  reluctance.  It  would  appear  that  some 
of  the  force  behind  this  pressure  was  due  to  an  antecedent 
pressure  upon  the  Government  by  labor.  Political 
action  may  work  both  directly  and  indirectly;  that  is, 
through  a  direct,  immediate  control  of  the  Government, 
and  by  an  indirect  means  through  elected  or  appointed 
officials.  Candidates  may  be  led  to  make  extravagant 
promises  before  election  for  political  effect  only  to  be 
sharply  and  insistently  reminded  of  them  after  election. 
A  coming  election,  too,  like  all  other  events,  casts  its 
shadow  before  it;  officials  who  are  looking  to  re-election 

325 


will  be  tempted  to  trim  their  sails  to  suit  the  political 
breeze. 

An  instance  of  the  same  thing  occurred  in  France  when 
a  proposed  eight-hour  day  law  was  before  the  Chamber 
of  Deputies.  Certain  employers  were  led  to  believe  that 
such  a  law  prevailed  or  was  to  prevail  immediately  else- 
where, that  it  was  useless  to  resist  the  inevitable.  Be- 
tween the  pressure  by  labor  from  below  and  by  the  Govern- 
ment from  above,  they  yielded  with  only  the  protest 
referred  to  elsewhere.^ 

The  political  action  in  labor  matters  is  in  Europe  a 
double  action.  Forces  are  at  work  from  below  and  from 
above.  Organized  labor  is  in  politics  to  seek  favorable 
legislation  for  itself.  From  above  the  Government  for 
many  reasons,  and  all  political,  is  "suggesting"  further 
"interference"  in  industry.  The  employer  finds  himself 
in  the  jaws  of  a  political  nutcracker,  one  jaw  of  which 
is  organized  labor  and  the  other  is  Government.  For 
the  moment  he  seems  caught  in  "the  fell  clutch  of  cir- 
cumstance." 

Political  action,  in  its  international  aspects,  aims  at 
different  sorts  of  changes.  In  so  far  as  it  is  possible, 
with  "due  regard  to  climatic,  geographical,  and  racial 
cnaracteristics,"  these  changes  are  to  become  standardized 
throughout  the  world  of  organized  labor.  One  pathway 
taken  by  political  action  leads  to  standardized  social 
reform.  Changes  of  this  sort  affect  society  as  a  whole, 
as  it  lives  rather  than  as  it  works.  Examples  are  health 
insurance,  unemployment  insurance,  education,  housing. 

Another  pathway  taken  by  political  action  leads  to 
industrial  changes.  These  affect  the  workers  as  workers, 
as  producers.  They  likewise  and  therefore  strike  more 
directly  into  the  managerial  problem.  Examples  are  the 
eight-hour  day,  the  minimum  wage,  the  nationalization 
of  industry,  and  equal  pay  for  men  and  women.  The 
theory  is  that  these  are  matters  for  legislation  just  as 
much  as  the  problem  of  general  social  reform.  When 
the  theory  is  applied,  it  is  found  that  a  third  party  has 
been  introduced  into  the  bargaining  process  between 
employer  and  cinployee,- -namely,  the  (joverninenl. 

This,  then,  is  the  situation  in  Europe  today.  Labor 
has  found  a  voice  through  the  League  of  Nations  to  make 

'  Sec  "I'Vcncli  Political  Labor  Movement,"  p.  2SG. 

326 


itself  heard  round  the  world.  It  has  the  machinery  now- 
ready  for  International,  co-operative  political  action,  and 
it  is  awake  to  the  potential  power  that  lies  here.  Both 
the  International  Socialist  Bureau  and  the  International 
Federation  of  Trades  Unions  are  busy  reconstituting 
their  organizations.  Internationally  and  nationally,  labor 
is  in  politics  with  its  industrial  weapon  ready.  America 
is  not  isolated  from  this  movement,  cannot  remain  aloof. 
It  is  a  situation  to  be  faced  in  all  countries  recently  at 
war  and  in  all  neutral  countries  where  labor  is  organized; 
it  is  spreading  out  to  touch  the  uttermost  parts  of  the 
organized  labor  world. 

Organized  labor,  like  "business,"  organized  and  un- 
organized, is  "in  politics."  Both  can  now  play  the  game 
fairly  or  unfairly,  for  good  or  for  ill;  it  is  the  motive,  not 
the  means,  that  counts.  How  far  political  action  can  or 
will  go  in  the  attempt  to  make  the  necessary  reconstruc- 
tive adjustments  is  still  an  open  and  possibly  an  un- 
considered question.  There  are  undoubtedly  problems 
not  fitted  for  legislative  action.  Labor  has  today  the 
advantage  in  a  better  organized  international  movement, 
a  better  machinery  for  international  propaganda,  and 
the  stimulation  of  newly  realized  power.  All  political 
activity  needs  to  be  carefully  considered  and  wisely  led. 
There  is  always  the  danger  that  conservatives  may 
obstruct  or  that  radicals  may  mislead.  In  Europe  today 
the  instant  rebound  from  political  obstruction  is  industrial 
action.  The  safe  course  is  the  right  attitude  and  spirit 
on  both  sides,  a  spirit  of  tolerance,  of  sanity,  of  "step-by- 
step"  progress,  of  sincere  co-operation  and  full  and 
sympathetic  understanding. 


327 


CHAPTER  XXI 

NATIONALIZATION   OF   BRITISH   RAILWAYS 

§  1.     Introduction 

It  has  been  shown  above^  that  there  is  much  vagueness 
in  the  concept  "nationalization."  It  has  clinging  to  it 
certain  historical  associations,  certain  socialistic  preach- 
ments, certain  war  emergency  measures  that  are  confusing. 
Latterly,  too,  it  has  begun  to  take  on  a  new  and  radical 
significance.  The  various  interpretations  of  the  term  as 
used  today  will  fall  into  one  or  the  other  of  three  general 
aspects: 

1.  Nationalization  may  mean  a  continuation,  in 
whole  or  in  part,  of  the  wartime  control  of  industry; 
that  is,  the  greatly  extended  system  of  "governmental 
regulation"  of  business  which  came  into  being  with  the 
exigencies  of  the  times. 

2.  There  is,  too,  the  proposal  by  some  citizens  for 
"government  ownership  and  operation."  This  means 
that  the  national  government,  as  now  constituted, 
shall  acquire  ownership  outright  of  at  least  the  more 
important  industries  and  will  operate  them  by  its 
own  agents  in  the  public  interest. 

3.  The  newest  phase  which  this  term  has  assumed  is 
that  the  national  government,  not  as  it  has  been  or  is, 
but  as  it  is  proposed  presently  to  make  it,  shall  take 
possession  of  at  least  the  more  important  industries 
and  shall  operate  them  not  by  its  accustomed  agents 
but  by  associations  of  the  workers  in  these  industries. 
This  is  "ownership  by  the  state  and  management 
by  the  workers"  and  marks  the  introduction  of  a  new 
principle. 

§  2.     Mi/nioi)  OF  Approach 

It  is  proposed  in  the  following  discussion  to  show 
what  has  been  done,  in  actual  practice,  in  the  process  of 
nationalization  in  Great  Britain  and  what  demands  are 
being  made  by  British  organized  labor  for  the  future  in 

»  Chapter  I,  p.  Vi. 

328 


this  regard.  The  subject  will  be  approached  through  a 
study  of  British  experience  with  "nationalized"  railroads, 
of  the  demands  for  a  nationalization  of  British  coal  mines 
and  other  "key  industries." 

§  3.     Government  Control  of  British  Railways 

Within  twenty-four  hours  after  Great  Britain  declared 
war  on  Germany,  the  British  Government,  under  pre- 
existing legislation,  took  possession  of  practically  the 
whole  railway  system  of  the  country.  A  Railway  Execu- 
tive Committee  was  appointed,  under  whose  direction  the 
several  general  managers  of  the  leading  British  railways 
were  to  work.  The  administrative  personnel  was  retained 
to  carry  on  the  actual  operation  of  the  roads.  Between 
these  operating  ofhcials  and  the  military  authorities,  the 
Railway  Executive  Committee  formed  a  liaison. 

At  once  Government  traffic  had  priority  on  all  railway 
lines.  In  accordance  with  prearranged  plans  the  pas- 
senger trains  were  mobilized  and  within  the  space  of  ten 
days  carried  to  the  Channel  120,000  troops  "without  a 
hitch." 

"War  broke  on  August  4th.  Ten  days  later  the  first  British 
Army,  120,000  strong,  were  in  France  with  full  equipment 
and  supplies.  Under  the  mobilization  schedules  prepared 
years  before  the  war,  trains  were  operated  at  fixed  intervals 
and  came  into  Southampton  every  twelve  minutes  for  sixteen 
hours  of  every  day,  or  from  dawn  until  dark.  The  regula- 
tions provided  that  if  a  train  were  over  twelve  minutes  late, 
it  should  lose  its  turn  on  the  schedule  and  should  be  side- 
tracked until  the  whole  troop  movement  was  completed. 
Not  a  single  train  lost  its  turn.  In  fact,  most  of  the  trains 
arrived  at  Southampton  from  twenty  to  thirty  minutes 
ahead  of  schedule.  This  one  movement  of  the  first 
Expeditionary  Force  called  for  1,500  trains."^ 

After  this  first  flurry  and  in  accordance  with  the  dictum 
that  business  should  go  on  as  usual,  the  Executive  Com- 
mittee announced  that  there  would  be  no  further  serious 
restriction  on  railway  traffic,  and  that  business  men  might 
expect  to  carry  on  their  usual  transactions.  A  determined 
effort  was  made  during  the  early  months  of  the  war  to 
keep  business  at  a  normal  level,  in  spite  of  the  Govern- 

1  Dixon  and  Parmelee:  Carnegie  Endowment  for  International  Peace.  "War 
Administration  of  the  Railways  in  the  United  States  and  Great  Britain," 
p.  104.     Oxford  University  Press,  1918. 

329 


ment's  first  call  for  right  of  way.     The  London  Railway 
News  is  quoted  as  follows: 

"There  was  also  a  steady  movement  in  favor  of  the  resump- 
tion of  some  of  the  curtailed  facilities,  .  .  .  when  the  initial 
uncertainty  and  alarm  settled  down.  Gradually  normal 
conditions  were  restored."  ^ 

Gradually,  however,  during  the  succeeding  years  of  the 
war,  one  restriction  after  another  was  imposed,  while 
business  was  compelled  to  adjust  itself  to  war  conditions. 

As  a  whole,  on  the  operating  side,  the  British  roads 
made  a  good  record  for  efficiency  during  the  war.  They 
handled  40  per  cent  more  traffic  than  they  were  built  to 
handle,  and  did  not  break  down  under  the  strain.  The 
general  public  was,  of  course,  Inconvenienced,  especially 
with  regard  to  passenger  traffic,  and  there  was  much 
grumbling  about  it.  But  the  necessary  transport  business 
of  the  country  was  performed  and  with  very  few  accidents. 
This  feat  was  accomplished  notwithstanding  the  grand 
error  at  the  outset  of  the  war  of  allowing  half  of  the  male 
employees  of  military  age  to  volunteer  to  the  colors. 
Many  were  returned  later  to  their  essential  civilian 
employment,  but  to  the  end  of  the  war  the  roads  had  to 
operate  with  a  largely  untrained  and  an  inadequate  staff. 
Altogether  the  record  of  operating  efficiency  under  these 
conditions  was  most  creditable.  The  Government  had 
a  share  in  this  accomplishment  through  its  measures  of 
unification;  but  here  also,  and  here  alone,  the  companies, 
as  private  business  organizations,  had  some  degree  of 
responsibility  and  influence. 

The  service  to  the  Government  by  the  British  railway 
system  was  of  high  efficiency.  How  the  railways  met  the 
first  mobilization  demands  has  already  been  Indicated. 

"Their  military  transportation  work  throughout  the  whole 
war  has  been  of  the  same  high  order.  They  contributed 
thousands  to  the  colors,  many  of  whom  served  in  France  in 
the  construction,  reconstruction,  or  operation  of  war  railways. 
They  loaned  equipment  to  be  shipped  cross-channel,  and 
contributed  bridges  and  even  rails  and  ties  from  out  their  own 
roadbeds.  In  fact  whole  branch  lines  were  in  some  cases  torn 
up  and  transported  bodily  to  France.  They  loaned  skilled 
men  to  munition  works  and- other  branches  of  war  industry. 

'  Dixon  and  Parmclcc:  Carnegie  Endowment  for  International  Peace.  "War 
Administration  of  the  Railways  in  the  United  States  and  Great  Britain," 
p  110.    Oxford  University  Press,  1918. 

330 


Skilled   boilermakers   from  some  of  the  railway   shops    were 
detailed  to  service  in  naval  dockyards."* 

On  the  financial  side,  however,  British  railways  broke 
down  utterly  during  the  war.  That  is,  they  emerged 
from  the  war,  on  high  Government  authority,"  financially 
in  a  semi-paralyzed  state."  For  this  the  Government 
had  sole  responsibility.  The  principle  that  distinguishes 
a  private  business  enterprise  from  a  Government  enter- 
prise, particularly  when  the  Government  operates  in  war- 
time or  other  emergency,  is  that  private  enterprise  runs 
on  a  basis  of  costs,  while  the  Government  enterprise  is 
judged  by  effectiveness,  by  accomplishments,  whatever 
the  cost.  Nevertheless,  when  peace  times  return  the 
Government  operation  will  be  tested  on  the  basis  of 
costs  relative  to  revenues.  It  is  the  judgment  by  this 
standard  that  declares  the  British  railway  system  finan- 
cially semi-paralyzed. 

Government  traffic  not  only  had  right  of  way  over 
ordinary  traffic  but,  to  simplify  accounting.  It  was  carried 
free  of  charge.  Also,  the  accounting  was  much  simplified 
with  respect  to  commercial  traffic.  For  example,  pro- 
rating between  the  different  companies  ceased;  each 
company  took  and  kept  as  revenue  the  charges  for  such 
private  traffic  as  originated  on  its  own  line.  In  return  for 
the  services  rendered  it  without  direct  payment,  the 
Government  guaranteed  dividends  and  interest  to  the 
several  companies,  using  the  year  before  the  war  as  the 
standard.  By  as  much  as  the  net  income  of  any  road  fell 
short  of  covering  its  1913  fixed  charges  and  dividends,  the 
Government  made  up  the  deficit. 

The  question  of  the  financial  success  of  governmental 
wartime  control  of  British  railways  has  been  obscured 
by  a  rather  inconsequential  debate  over  what  sort  of  a 
"bargain"  the  Government  had  made  with  the  railway 
companies.  There  have  been  complacent  statements  in 
high  quarters  that  the  result  showed  that  the  Government 
had  made  "a  very  good  bargain."'^  Although  compara- 
tively unimportant,  it  is  worth  while  to  go  into  this  subject 
somewhat  to  correct  an  error.  The  basis  of  the  supposed 
"good  bargain"  is  to  compare  what  the  Government 
paid  on  its  guarantee  of  interest  and  dividends  with  the 

1 "  War  Administration  of  Railways  in   United   States  and   Great   Britain," 
pp.  107-8. 
^  Mr.  A.  Bonar  Law,  speaking  for  the  Government  in  1916. 

331 


value  ("at  pre-war  authorized  rates")  of  what  it  received 
in  the  way  of  transport  services  performed  by  the  railways 
without  direct  compensation.  For  the  war  period  the 
aggregate  of  the  unpaid-for  services  of  the  railways  in 
round  figures  is  S545,000,000  and  the  aggregate  of  the 
Government  payments  on  guarantee  is  $464,000,000.-^ 
The  difference  of  $81,000,000  looks  like  a  saving  which  the 
Government  made  by  reason  of  its  financial  arrangements 
with  the  roads. 

But  two  considerable  items  have  been  omitted  from 
this  brief  statement  of  the  account.  On  the  one  hand, 
there  were  additional  services  performed  for  the  Govern- 
ment without  direct  charge,  by  the  "steamboats,  docks, 
and  canals"  owned  by  the  railways,  estimated  roughly 
at  a  maximum  of  $73,000,000;  and  on  the  other  hand, 
there  was  a  suspense  account  due  the  railways  for  "eventu- 
ally making  good  the  extra  wear  and  tear  arising  from 
additional  traffic"  (and  for  adaptation  of  equipment  and 
replacement  of  stores),  estimated  to  be  perhaps  as  much 
as  $195,000,000.^  Thus,  the  corrected  revenue  and  expense 
account  for  the  Government  on  this  transaction  shows, 
in  place  of  a  gain  of  $81,000,000,  a  loss  of  about  $41,000,000. 
And  this  is  for  the  period  of  the  war  only,  ending  with 
1918.  For  the  two  years  following  the  close  of  the  war, 
the  scale  will  turn  more  heavily  against  the  Government. 
The  guarantee  of  the  Government  continues  in  full  force 
and  the  expense  of  operation  has  increased  so  enormously 
that  the  Government  will  have  to  meet  this  guarantee 
in  full.  During  the  war  in  spite  of  rising  costs,  and  the 
impediment  of  Government  "priorities,"  the  railways 
were  able  to  earn  from  their  ordinary  traffic  up  to  1918 
considerable  sums  ($492,000,000  in  the  aggregate)  toward 
meeting  their  fixed  charges. 

The  complete  record  for  the  period  of  the  war  and  for 
1913,  the  year  used  as  the  basis  for  guaranteed  returns, 
is  shown  in  ihe  following  table  taken  from  the  British 
White  Paper: 

'  The  pound  sterling  is  reduced  to  dollars  by  multiplying  by  4.86. 

*  White  Paper  of  the  Board  of  Trade,  entitled  "Railway  Working  During 
the  War"  (Cd.  147),  as  condensed  by  Mr.  J.  11.  Parmelee,  footnote  to  Table  4. 
This  Suspense  Account  of  nearly  $2(K),(X)(),(KH)  for  "extra  wear  and  tear,"  etc., 
is  additifjnal  to  the  deferred  maintenance  "arrears  to  be  carried  out" — with 
respect  to  permanent  way  and  rolling-stock  wiiich  the  railways  were  permitted 
to  charge  to  Income  Account  and  which  for  tiie  whfjjc  period  of  the  war  aggre- 
gates $1(;8,(KH),(XK).  (Compare  Table  1  of  the  IVhitr  Paper,  see  p.  333.) 
From  other  evidence,  also,  it  is  clear  that  the  plant  of  the  British  railways  has 
come  out  of  the  war  in  a  very  much  rundcjwn  condition. 

332 


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333 


The  condensed  income  account  of  British  railways  forthe 
period  1913-1918  is  given  on  page  335.  It  will  be  seen  that 
the  operating  revenues  increased  from  $577,658,100  in 
1913  to  $611,557,876  as  an  annual  average  for  1914-1918, 
or  5.9  per  cent.  This  latter  figure,  however,  includes  no 
payments  for  Government  traffic.  Operating  expenses 
increased  from  $365,606,567  in  1913  to  $499,842,356  as 
an  annual  average  for  1914-1918,  or  36.7  per  cent.  The 
net  revenue  fell  from  $212,051,533  in  1913  to  $111,715,520 
as  four-year  average,  or  47.3  per  cent.  This  figure  includes 
no  payments  for  Government  traffic.  The  Government 
paid  on  its  guarantees  an  annual  average  of  $105,222,441. 

The  matter  of  supreme  importance  respecting  railway 
finance  in  England  during  the  war  was  not  the  inconsider- 
able profit  or  loss  of  the  Government,  but  the  fact  that 
the  whole  railway  system  came  out  of  the  war  financially 
wrecked  —  in  "a  semi-paralyzed  state,"  again  to  quote 
Sir  Eric  Geddes.^  There  were  several  reasons  for  this 
outcome.  For  one  thing  the  railways  were  not  allowed 
to  raise  their  rates  for  ordinary  freight  traffic  during  the 
war.^  In  1917  the  passenger  rates  were  raised  50  per 
cent,  not  so  much  for  the  purpose  of  increasing  revenue 
as  to  discourage  travel.  Freight  rates  remained  stationary 
in  spite  of  the  rapidly  increasing  operating  expenses. 
This  last  consisted  chiefly  in  the  enormous  advance  of 
wages  to  railway  labor.  It  is  conceded  by  all  authorities 
that  British  railway  wages  before  the  war  were  very  low  — 
far  lower  than  in  the  United  States  • —  and  insufficient  to 
afford  decent  living  conditions.  Also  it  is  conceded  that 
special  war  advances  in  wages  were  necessary  to  enable 
the  earnings  of  railway  workers  to  compare  favorably 
with  the  earnings  of  the  munitions  workers.  It  is  a 
question,  however,  whether  the  advances  of  railway 
wages  owing  to  political  influence  were  not  needlessly 
excessive.  However  this  may  be,  the  result  of  the  succes- 
sive concessions  to  labor  was  that  by  the  end  of  the  war 
the  increase  of  wages  amounted  to  more  than  the  total 
payroll  before  the  war.  And  this  was  not  all.  The 
movement  had  acquired  a  momentum  so  that  operating 
expense  for  laboi-  continued  to  mount  upward  after  the 

'  London  Times,  March  18,  1919,  verbatim  report  of  the  debate  on  the 
Ministry  of  Ways  and  Communications  Bill. 

*  In  the  course  of  time  this  caused  the  railways  to  undercut  so  much  the 
coastwise  traffic  as  to  cause,  even  after  the  war,  great  unnecessary  congestion 
on  the  railways. 

334 


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335 


war  was  over.    And  to  this  is  to  be  added  the  increase  of 
other  operating  expenses  beside  that  for  labor.^ 

In  the  recently  published  White  Paper  of  the  Board  of 
Trade  already  referred  to,  one  finds  the  following  Table  3: 

STATEMENT  OF  ESTIMATED  INCREASED  COST  IN  WORKING 
RAILWAYS  DURING  THE  FINANCIAL  YEAR  ENDING  MARCH 
31,    1920,  AS  COMPARED  WITH  THE  YEAR   I913 

War  wage  and  other  concessions $277,000,000 

Eight-hour    day    and    new    concessions    re- 
cently granted  or  still  under  discussion  .  .  $97  to  121,000,000 
Extra  cost  of  material  and  coal 131,000,000 


$505  to  $529,000,000 
It  was  evidently  upon  the  basis  of  the  foregoing  table 
that  Sir  Eric  Geddes  made  the  statement,  which  attracted 
such  wide  attention,  in  his  speech  of  March  17th,  on  the 
second  reading  of  the  Transport  Bill,  that  "today  the 
railways  are  being  worked  at  a  loss  of  something  like  a 
quarter  of  a  million  [pounds]  a  day  —  a  hundred  million 
[pounds]  a  year."  There  followed  immediately  an  ex- 
pression, not  so  widely  quoted,  that  showed  that  it  was 
not  net  loss  but  increase  of  cost  of  which  Sir  Eric  Geddes 
was  speaking;  "the  best  estimate  I  can  get  is  somewhere 
about  £90,000,000  or  £100,000,000  [$437,000,000  or 
$486,000,000]  in  increased  cost."  But  later  in  the  speech 
he  returned  to  the  first  form  of  statement: 

"Up  to  the  time  of  the  armistice,  the  Government  traffic 
practically  made  up  [offset]  the  deficit,  but  since  the  armistice 
the  deficit  on  railways  has  been  steadily  increasing.  That 
makes  the  £90,000,000  or  £100,000,000  a  year  which  are  short." 

Now  to  get  the  true  "loss"  or  "deficit,"  obviously, 
one  must  deduct  the  increase  of  revenue  from  the  increase 
of  costs.  During  the  war  the  revenues  of  the  railways, 
as  shown  by  Table  1  of  the  White  Paper  increased 
by  $83,000,000."  With  the  normal  growth  of  business 
and  especially  if  reasonably  increased  freight  rates  were 
put  into  cfi^cct,  in  the  future  one  might  expect  that  the 
increase  of  traffic  revenue  might  still  further  offset  the 
increase  in  operating  costs  inherited  from  the  war.  Both 
in  Sir  Eric  Geddcs's  speech  on  the  Transport  Bill  and  else- 
where, there  seems  to  have  been  a  tendency  on  the  part 
of  those  favoring  Government  control  to  paint  the  picture 

'  A  (general  railway  strike  was  called  September  27th,  for  further  wage  increases. 

*  Exclusive  of  what  never  should  have  been  included  in  the  Table — "the  esti- 
mated amounts  which  would  have  been  received  for  Government  tratfic  if 
charged  for  at  pre-war  auiliorized  rates."     Cf.  p.  .'J^W. 

336 


of  the  financial  condition  of  the  railways,  present  and 
future,  in  unduly  black  colors.  But  the  actual  situation 
is  certainly  bad  enough.  The  books  of  the  railways  of 
Great  Britain  collectively  are  far  from  balancing.  There 
is  the  vital  question:  What  is  to  be  done  to  meet  a  situa- 
tion which  is,  admittedly,  on  all  hands,  "very  serious".? 
Actual  expenditures  charged  to  "maintenance  and 
renewal  of  way  and  works"  increased  36.6  per  cent  in  1918 
as  compared  with  1913,  while  the  annual  average  was 
10.5  per  cent  greater  than  in  1913.  "Maintenance  and 
renewal  of  rolling  stock"  increased  65.1  per  cent  in  1918 
over  1913,  the  annual  average  being  26.5  per  cent  greater 
than  in  1913.  These  charges  for  the  war  period  were 
unduly  low  because  maintenance  was  necessarily  deferred 
on  account  of  lack  of  adequate  supplies  of  labor  and 
materials;  the  Government  therefore  permitted  the  rail- 
ways to  charge  to  expenses  and  set  up  in  the  form  of 
reserves,  each  year,  such  sums  as  could  be  used  eventually 
to  repair  the  wear  and  tear  that  arose  from  heavy  war 
traffic.  These  sums  (which  appear  in  Table  1  as  "arrears 
to  be  carried  out")  aggregated  $105,155,512  for  mainte- 
nance of  way,  and  $63,215,518  for  maintenance  of  rolling 
stock,  or  a  total  for  maintenance  arrears  of  $168,371,030, 
the  annual  average  being  $38,184,789.  A  large  part  of 
the  $168,371,030  reserve  thus  set  up  has  been  invested 
in  Government  War  Bonds,  until  such  time  as  the  renewals 
can  be  carried  out. 

TABLE  4:  MAINTENANCE  EXPENDITURES  FOR  THE  YEAR 
191 8  AND  ANNUAL  AVERAGE  FOR  THE  WAR  PERIOD  AS 
COMPARED  WITH   I9I3 


Year  1913 

Annual 

Average 

Aug.  5,  1914 

to 
Dec.  31,1918 

Year  1918 

Per  cent 
of  Increase 

Item 

Annual 

Aver'ge 

over 

1913 

1918 
over 
1913 

Maintenance  and  re- 
newal of    way    and 
works 

Arrears  to  be  carried 
out 

$57,513,806 

57,513,806 
64,518,193 

64,518,193 

$63,540,846 

23,854,416 
87,395,262 

81,643,976 

14,340,373 
95,984,349 

$78,570,450 

31,560,362 
110,130,812 

106,519,110 

16,191,084 
122,710,194 

10.5 

52.0 
26.5 

48.8 

36.6 

Total  charge 

Maintenance  and  re- 
newal of  rolling  stock 

Arrears  to  be  carried 
out 

91.5 
65.1 

Total  charge 

90.2 

Total —  Maintenance 

$122,081,999 

$183,379,611 

$232,841,006 

50.3 

90.81 

Condensed  from  British  White  Paper,  by  Julius  H.  Parmelee. 

337 


The  remedy  for  the  exceedingly  difficult  situation  urged 
by  Labor  and  some  others  has  been  "nationalization." 
On  the  other  hand,  there  have  been  conservative  con- 
structive measures  suggested,  such  as  the  bill  put  forward 
by  the  Federation  of  British  Industries.  The  remedy 
which  has  been  adopted,  being  embodied  in  the  Govern- 
ment's Ministry  of  Ways  and  Communication  Bill  (the 
Transport  Bill)  already  referred  to  is  disguised  nationali- 
zation. As  this  Report  of  your  Commission  is  being 
prepared  for  the  press,  it  is  announced  that  the  Transport 
Bill,  considerably  amended,  has  passed  and  under  it 
Sir  Eric  Geddes  has  been  designated  as  the  first  Minister 
of  Transport.  The  very  sweeping  powers  of  the  new 
Minister  over  not  only  railways,  but  roads,  tramways 
(other  than  municipal),  docks  and  harbors  and  canals, 
are  conferred  in  terms  for  only  two  years.  Ostensibly 
it  is  a  temporary  measure  to  meet  the  present  crisis; 
also,  it  is  ostensibly  a  measure  confined  to  "control"  or 
"unification,"  with  some  limited  powers  of  construction 
and  purchase.  The  private  companies  are  still  "to  run" 
the  roads  but  under  the  co-ordinating  authority  of  the 
Minister,  who  also  has  authority  over  rates  and  fares 
to  be  charged  and  wages  and  salaries  to  be  paid.  The 
owners  of  the  roads  are  still  owners  at  law  with  their 
incomes  guaranteed.  Ostensibly  the  question  of  whether 
the  country  is  to  have  strict  nationalization  of  the  railways 
or  not,  is  to  be  decided  by  Parliament  at  the  end  of  the 
two-year  experimental  period. 

In  fact,  however,  the  die  has  been  cast;  the  decision 
has  been  made.  So  eminent  a  critic  of  the  Government's 
measure  as  Mr.  W.  M.  Ackworth,  himself  favorable  to 
the  bill,  has  discussed  the  subject  at  length  in  an  article  in 
the  Quarterly  Review  for  July,  1919,  which  reveals 
fully  the  true  action  taken.  Mr.  Ackworth  at  first  seeks 
to  direct  his  arguments  to  a  defense  of  "nationalization 
as  an  interim  measure,  at  least,  though  not  necessarily 
as  a  permanent  policy,"  but  he  ends  with  outlining  the 
best  forms  of  administration  to  be  set  up  "on  the  assump- 
tion that  nationalization  has  to  come"  and  the  process 
has  to  be  "carried  through."  His  article  as  a  whole 
"smacks"  of  permanent  nationalization.  Mr.  Ackworth 
was  a  member  of  the  "Railway  Advisory  Panel"  ap- 
pointed by  the  Board  of  Trade  in  November,  1917, 
"to  consider  the  question  of  the  future  of  the  railways." 
In  the  Review  article   here  referred  to  he  elaborates  the 

338 


arguments    in    favor    of    the    Transport    Bill    previously 
enunciated  by  Sir  Eric  Geddes  in  his  speech  in  Parliament. 

In  outline  they  are  as  follows: 

1.  If  the  railways  are  ever  to  pay  their  way  again, 
there  must  be  revolutionary  changes 

2.  On  the  one  hand,  receipts  must  be  largely  increased; 
on  the  other  hand,  expenses  must  be  greatly  reduced. 

3.  "That  the  higher  charges  are  made  on  the  authority 
of  the  state  for  the  direct  benefit  of  the  taxpayer  is  the 
only  ground  on  which  we  can  expect  them  to  be  submitted 
to." 

4.  The  chief  reliance  in  restoring  equilibrium  must  be 
increased  economies  reducing  the  expense  of  conducting 
transportation. 

5.  This  last  can  be  achieved  only  by  an  engineering 
reconstruction  of  permanent  way  and  equipment,  and 
other  extensive  measures  of  standardization,  which  will 
make  possib:e  as  heavy  train  loads  and  low  ton-mile 
costs  as  the  geographical  conditions  of  England  permit. 

6.  But  "long  trains  of  fully  loaded  trucks  mean  less 
rapid  dispatch  of  traffic."  English  traders  accustomed 
to  an  express  service  "at  goods  rates"  will  find  their 
"hereditary  methods"  in  this  and  in  other  particulars 
seriously  interfered  with.  In  like  manner  the  traveling 
public  must  submit  to  marked  "reductions  in  facilities 
•formerly  given." 

7.  With  respect  to  shippers  and  passengers  alike 
"the  state  alone  can  face  and  overcome  their  recalci- 
trance." 

This  last  is  the  distinctive  idea  in  the  whole  line  of 
argument  employed  by  Mr.  Ackworth.  Vast  changes  in 
the  conduct  of  British  railroading  must  be  made  which 
will  raise  vast  objections  on  the  part  of  the  public;  and 
the  state  alone  can  meet  those  objections. 

The  distinctive  feature  of  Sir  Eric  Geddes's  defense  of 
the  Government's  measure  is  the  necessity  of  "unifica- 
tion," not  only  of  the  railways  but  of  the  whole  system 
of  transportation  of  Great  Britain  —  canals,  roads,  docks, 
and  harbors,  —  everything  that  has  to  do  with  land 
transportation. 

339 


"The  era  of  competition  is  gone.  .  .  ." 

"The  transportation  agencies  of  the  country  today  are 
barren  and  paralyzed.  .  .  ." 

"We  have  got  to  trust  somebody  or  some  one  to  get  co- 
ordination."^ 

And  that  somebody,  it  is  assumed,  must  be  the  state; 
the  state  alone  as  manager,  —  not  merely  as  a  helper  of 
private  enterprise  by  means  of  appropriate  legislation. 

The  chief  subject  handled  by  both,  on  which  Mr. 
Ackworth  and  Sir  Eric  differ,  is  the  possibility  of  finding 
relief  to  a  considerable  degree  from  raising  freight  rates. 
Sir  Eric  waives  that  consideration  and  looks  solely  to 
economies  from  unification,  etc.  Mr.  Ackworth  says 
"there  is  no  question  that  goods  rates  will  have  to  be 
drastically  raised." 

In  the  Parliamentary  debate  on  the  second  reading 
of  the  Transport  Bill,  March  17,  1919,  the  strongest  plea 
in  opposition  was  put  forward  by  Mr.  M.  Stevens,  one 
of  the  largest  shippers  of  England.  He  maintained  that 
great  changes  in  economy  in  working  the  railways  were 
indeed  called  for  and  possible.  He  denounced  strongly 
the  competitive  waste  of  present  methods  which  should 
be  remedied  by  thoroughgoing  reforms.  But,  he  held 
that  these  improvements  could  be  accomplished  without 
even  temporary  nationalization.  One-half  the  huge 
increase  of  wages  which  accounted  for  Sir  Eric's  loss  of 
£100,000,000  a  year  was  spent,  he  said,  on  services 
which  "had  nothing  at  all  to  do  with  the  conveyance  of 
traffic  by  the  railways."  If  the  railways  would  do  "what 
the  traders  had  urged  for  years, "  that  is,  "  make  a  separate 
rate  charge  for  conveyance,"  and  also  cease  doing  "carting 
or  any  terminal  services  below  cost,"  it  would  be  found 
that  "the  loss  of  £100,000,000  would  be  rapidly  reduced." 
He  ended  by  suggesting  that  the  bill  which  had  been 
prepared  by  the  Federation  of  British  Industries  be  taken 
up  and  given  a  second  reading. 

Apparently  the  plans  opposed  to  the  Government's 
scheme  were  given  scant  consideration.  The  Transport 
Bill    virtually    committing    Great    Britain    to    ultimate 

'  Not  merely  financially  paralyzed,  as  stated  clscvvherc  in  the  speech,  but 
suffering  from  long-standing  retarded  development.  Examples  of  the  fact  of 
retarded  development  of  railways  in  Great  Britain  could  be  multiplied.  For 
instance,  the  7(K),{)()0  privately  owned  freight  cars  (half  the  total  number)  which 
occasions  non-standardization  of  brakes,  etc.,  and  an  enormous  return-empty 
mileage.     The  Mliiisier  will  have  power  to  buy  out  the  private  car  owners. 

340 


nationalization  of  railways,  and  all  other  means  of  land 
transport  as  well,  was  passed  practically  as  a  piece  of 
"panic  legislation."  The  country  was  appalled  by  the 
existing  railway  financial  burden;  it  was  believed  that 
that  burden  must  be  chiefly  removed  by  transport  econo- 
mies; it  was  assumed  that  those  economies  could  only  be 
achieved  on  a  sufficient  scale  through  the  unifying  control 
of  the  Government.  Mr.  Ackworth  is  too  deep  a  student 
of  the  world's  railway  history  not  to  realize  that  some- 
thing more  than  assumptions  are  needed  with  respect 
to  "economies"  to  be  realized  at  the  hands  of  the  Govern- 
ment. "Five-sixths  of  the  upper  and  middle  classes," 
he  says,  "on  principle  object  to  state  management." 
They  ask:  "What  is  the  use  of  talking  of  economy.^ 
The  Government  with  its  bureaucratic,  dilatory,  red-tape 
methods,  will  dissipate  through  inefficiency  all  the  theo- 
retical economies  on  which  you  lay  stress."  The  answer 
which  Mr.  Ackworth  makes  to  this  objection  is  significant 
indeed:  the  Government  is  now  going  to  succeed  in  this 
vast  undertaking  (it  is  going  to  "face  and  overcome" 
the  popular  disapproval  which  previously  he  had  men- 
tioned as  the  great  obstacle  to  economy)  by  adopting  new 
methods  which  mean  in  effect  the  abandonment  of 
democracy.  "Subject  to  the  general  approval  of  Parlia- 
ment," we  read,  "the  railways  must  be  an  almost  auto- 
nomous service,  conducted  on  other  than  civil  service 
methods,  and  left  to  work  out  their  salvation  with  some- 
thing of  the  same  freedom  which  the  Home  authorities 
concede  to  commanders  in  the  field."  In  short,  a  semi- 
military  autocracy  is  to  do  the  trick  of  achieving  economies 
where  they  have  never  been  achieved  before. 

The  powers  originally  granted  by  the  Transport  Bill 
were  so  sweeping  that  British  public  opinion  practically 
rebelled  against  them.  The  right  of  proceeding  under 
Orders  in  Council  "to  establish,  maintain,  and  work 
transport  services  by  land  or  water"  has  been  eliminated 
rom  the  measure  as  enacted,  and  also  power  over  "the 
supply  of  electricity."  Not  the  least  significant  of  the 
items  omitted  is  the  following,  which  stood  in  the  original 
draft  of  the  bill: 

"Any  rates,  fares,  tolls,  dues,  and  other  charges,  directed 
by  the  Minister  shall  be  deemed  to  be  reasonable,  and  may 
be  charged,  notwithstanding  any  statutory  provisions  limiting 
the  amount  of  such  charges  or  increases  therein." 

341 


This  clause  as  revised  now  reads: 

"Notwithstanding  anything  contained  in  this  Act  the 
rights  of  a  consignor  or  consignee  of  goods  or  minerals  .  .  . 
under  the  Railway  and  Canal  Traffic  Acts  .  .  .  shall  not 
be  deemed  to  be  affected." 

The  demand  for  the  nationalization  originated  with 
the  Labour  Party.  Encouragement  of  a  campaign  sort 
came  from  the  Coalition  Government  prior  to  the  last 
elections,  but  with  the  formation  of  the  Ministry  of 
Ways  and  Communications  the  measure  was  more  or  less 
sidetracked.  The  present  Government  shrinks  from  the 
responsibility  of  direct  ownership  and  control.  British 
individualism,  finding  strong  expression  through  the 
shippers,  needless  to  say,  is  opposed  to  nationalization. 
As  one  man  conversant  with  the  situation  has  said: 

"Whether  or  not  we  shall  have  government  ownership 
depends  entirely  upon  what  happens  in  the  next  two  years. 
The  Ministry  of  Ways  and  Communications  will  certainly 
do  everything  possible  to  avoid  it.  Much  depends  upon 
the  financial  position.  If  it  is  found  that  at  the  expiration  of 
two  years  the  railways  are  fairly  self-supporting  and  in  no 
great  financial  danger,  they  will  probably  be  returned  to  the 
proprietors  but  with  a  considerable  and,  I  think,  beneficial 
degree  of  elimination  of  unnecessary  competition,  the  general 
pooling  of  wagons,  collective  purchasing,  and  a  number  of 
other  things  which  will  tend  to  reduce  operating  costs  and 
which,  for  that  reason,  will  be  highly  beneficial.  There  are 
altogether  too  many  railway  companies  in  England  and  a 
great  deal  could  be  saved  in  administration  and  overhead 
charges  if  consolidation  took  place.  It  is  quite  possible  that 
for  operating  and  administrative  purposes  we  shall  see  the 
railways  of  the  United  Kingdom  grouped  in  from  five  to  seven 
districts,  each  under  the  direction  of  a  general  manager  and 
headquarters  staff." 


342 


CHAPTER  XXII 
NATIONALIZATION  OF  BRITISH  COAL   INDUSTRY 

§  1,     Introduction 

Her  ability  to  produce  coal  cheaply  and  to  employ  it 
in  the  manufacture  of  raw  materials  has  been  the  founda- 
tion of  Great  Britain's  industrial  supremacy.  She  is 
primarily  a  manufacturing  and  exporting  nation.  Her 
trade  and  industry  have  had  two  phases.  Aided  by 
the  ownership  of  a  large  proportion  of  the  world's  shipping 
and  by  a  free  trade  policy,  she  has  bought  raw  and  partly 
manufactured  materials  and  brought  them  to  her  factories 
for  manufacture,  in  successful  competition  with  nations 
whose  raw  materials  lay  closer  at  hand.  Further,  aided 
by  cheap  coal  and  cheap  labor,  she  has  been  able  to 
manufacture  these  materials  and  export  them. 

Her  people  are,  consequently,  employed  mainly  in 
industries,  the  products  of  which  must  be  sold  on  the 
markets  of  the  world.  A  shrinkage  in  demand  for  these 
products  tends  to  produce  unemployment,  business  paraly- 
sis and  national  loss.  Such  a  shrinkage  could  result  from 
the  ability  of  other  nations  to  supply  goods  to  foreign 
markets  at  a  lower  price,  or  from  the  inability  of  Great 
Britain  to  continue  to  produce  as  cheaply  as  she  formerly 
produced. 

Her  industrial  supremacy  has,  by  no  means,  remained 
unchallenged.  Prior  to  the  war,  Germany  was  putting 
cheaper  goods  upon  many  markets,  even  in  the  British 
Dominions,  where  cheapness  counted.  The  United 
States  of  America  were  challenging  her  manufacturers 
with  products  manufactured  by  high  priced  labor 
which  was  so  efficient  as  to  reduce  the  labor  cost  per  unit, 
and  thus  render  their  competition  a  serious  matter  for 
British  foreign  trade. 

The  war,  however,  dealt  a  serious  blow  to  her  export 
trade.  Her  tonnage  in  ships  was  greatly  reduced  by  the 
submarine  losses,  and  by  the  transportation  of  soldiers 
and  war  material.  As  a  consequence  there  was  a  diminu- 
tion in  the  volume  of  her  export  trade.    Export  restrictions 

343 


swept  some  of  It  away  at  a  stroke.  The  heavy  demands 
upon  her  factories  to  supply  war  demands  turned  them  to 
domestic  production,  primarily.  Her  mounting  war 
debt,  while  not  converting  her  entirely  from  a  creditor 
to  a  debtor  nation,  yet  caused  her  to  borrow  abroad, 
after  disposing  of  a  large  quantity  of  foreign  securities. 
The  condition  of  her  public  credit,  therefore,  increased 
the  urgency  for  larger  quantities  of  exports.  At  the  same 
time  her  former  markets  were  going  to  other  countries. 
The  United  States  entered  South  America;  Japan 
pushed  her  goods  In  the  Orient.  In  sum,  the  war  ended 
with  a  great  challenge  to  the  foreign  trade  of  Great 
Britain. 

But  the  two  elements  of  her  former  success  In  manufac- 
ture no  longer  existed.  Cheap  labor,  as  the  foregoing 
chapters  of  the  report  have  shown,  had  acquired  a  new 
status.  Cheap  coal  seemed  to  have  gone  forever.  The 
situation  in  the  coal  industry  was  such  as  to  create  national 
concern.  The  miners  of  the  country.  In  January  and 
February,  1919,  asked  for  an  advance  of  30  per  cent  In 
their  wages  and  a  decrease  of  the  working-day  from 
eight  hours  to  six  hours,  with  the  application  of  the 
principle  of  nationalization  to  the  ownership  of  the  mines. 

The  significance  of  this  demand  arose  In  part  from  the 
character,  powers,  and  strength  of  the  Miners'  Federation. 
This  body  consists  of  800,000  mine  workers,  covering 
fully  95  per  cent  of  those  employed  around  mines.  Strong 
numerically,  they  have  been,  further,  most  aggressive 
and  truculent.  They  have  never  been  so  amenable  to 
the  processes  of  compromise  and  conciliation  to  which 
even  some  of  the  most  militant  unions  submitted  during 
the  war.  Thus,  they  refused  to  sign  the  Treasury  Agree- 
ment, March,  1915,  being  unwilling  to  surrender  the  right 
to  strike.  By  a  series  of  strikes  from  August,  1914, 
onwards  against  the  employment  of  non-unionists,  they 
forced  their  employers  to  agree  to  compulsory  unionism. 
The  compulsory  arbitration  of  the  Munitions  Act  repelled 
them,  since  the  Coal  Mines'  Minimum  Wage  Act,  which 
had  been  passed  in  1912  to  settle  a  disastrous  strike,  had 
given  them  machinery  for  the  voluntary  settlement  of 
disputes. 

In  July,  1915,  the  miners  of  South  Wales  struck  and 
compelled  the  Government  to  proclaim  them  as  coming 

344 


under  the  provisions  of  the  Munitions  Act.  This  did 
not  ensure  either  continuity  of  production  or  industrial 
peace,  and  in  December,  1916,  the  Government,  under 
the  authority  of  the  Defense  of  the  Realm  Act,  took 
control  of  the  mines  of  South  Wales,  at  the  same  time 
conceding  the  miners  a  substantial  increase  in  wages. 
The  rest  of  the  coal  fields  of  Great  Britain  were  pro- 
claimed under  Government  control  in  March,  1917. 
Throughout  the  war,  then,  they  had  given  considerable 
trouble  to  the  country  and  the  national  Government, 
and  had  seriously  hampered  the  production  of  munitions. 

Important  as  the  coal  mining  industry  is  to  the  nation, 
and  serious  as  a  nation-wide  strike  within  it  would  be, 
the  situation  had  been  intensified  since  the  formation  of 
the  Triple  Industrial  Alliance  in  December,  1915.  By 
this  amalgamation  the  coal  industry  came  to  occupy  a 
strategic  position  in  the  British  world  of  industrial 
relations.  In  this  Triple  Alliance  the  miners  are  pre- 
dominant, because  of  their  numbers  and  because  their 
President,  Robert  Smillie,  is  also  the  chairman  of  the 
Alliance.  These  three  associations  of  miners,  railway 
men,  and  transport  workers  are  pledged  to  take  joint 
action  on  a  subject  of  industrial  dispute,  and  could, 
probably,  effectively  stop  the  wheels  of  industry.  Under 
this  threat  the  potential  damage  the  miners  might 
inflict  compelled  serious  attention  to  their  aims. 

The  demands  they  made  in  February,  1919,  were 
obviously  such  as  to  exercise  also  a  far-reaching  effect 
upon  industry.  An  increase  in  wages  of  30  per  cent  and 
a  reduction  in  working  hours  of  25  per  cent  could  not  but 
have  the  effect  of  increasing  the  cost  of  coal  beyond  a 
price  that  was  already  abnormally  high.  This  increase 
in  cost  of  coal  would  influence  cost  and  quantity  of 
production  in  iron,  steel,  machinery,  and  shipping,  and 
materially  reduce  the  volume  of  exports.  Should  the 
new  price  of  coal  prove  to  make  its  export  unprofitable, 
more  than  one-tenth  of  the  former  foreign  exports  of 
the  country  would  have  been  lost  at  a  stroke.  Freights 
on  raw  materials  and  food  would  be  considerably  in- 
creased. A  general  increase  in  the  prices  of  goods  produced 
for  the  home  market  and  a  rise  in  the  cost  of  living  would 
result.  Even  without  the  impetus  and  impulse  of  direct 
invitation,  this  advance  in  the  cost  of  living  would  in- 
evitably result  in  demands  for  increased  wages  in  other 
industries.     In   certain  of  these  industries,  where  labor 

345 


costs  formed  a  considerable  item,  these  increased  wages 
would  prove  more  serious  than  the  effect  of  the  increase 
In  the  price  of  raw  materials  and  other  cost-determining 
factors  which  had  resulted  from  the  war. 

In  view,  therefore,  of  the  far-reaching  effects  which  an 
increase  in  the  price  of  coal  might  have  upon  industry  in 
general,  the  Government  refused  at  first  to  make  any 
considerable  advance  in  wages.  In  order  to  bring  the 
advance  in  miners'  wages  during  the  war  to  a  parity  with 
the  advance  in  the  cost  of  living,  the  Minister  for  Labour 
replied  to  their  demand  with  an  offer  of  an  addition  of 
one  shilling  per  day  to  the  war  bonus  of  18  shillings  per 
week  which  miners  in  general  were  receiving.  In  appear- 
ance this  was  an  advance  of  33M  per  cent.  But  what 
the  miners  were  asking  for  was  an  advance  of  30  per  cent 
upon  their  earnings,  according  to  the  complicated  sliding 
scales  in  vogue,  upon  which  the  war  wage  would  still 
remain  a  bonus.  Their  demands  exceeded  the  offer  made 
them  by  as  much  as  their  earnings  exceeded  the  war 
bonus.  As  the  government  offer  took  no  account  of 
their  other  demands  for  reduced  hours  and  the  national- 
ization of  the  mines,  the  miners  determined  by  an  over- 
whelming majority  to  strike  and  fixed  the  date  for  their 
withdrawal  from  the  mines. 

The  situation  was  too  serious  to  allow  matters  to  drift. 
While  the  miners'  demands  were  before  the  country,  the 
railway  men  and  the  transport  workers  were  making 
demands  of  their  own.  Any  policy  which,  whether  by 
default  or  by  inadvertence,  led  these  three  groups  of  the 
Triple  Alliance  to  act  in  unison,  would  have  precipitated 
the  most  serious  conflict  England  had  ever  known  in  her 
Industrial  history.  Parliamentary  and  constitutional 
government  would  have  run  grave  risks  of  being  over- 
thrown by  force.  The  Government,  therefore,  took  the 
situation  seriously  in  hand,  and  appointed  a  Royal 
Commission  with  statutory  powers  "to  inquire  Into  the 
position  of,  and  conditions  prevailing  In,  the  coal  in- 
dustry." 

§  2.     Output 

The  evidence  presented  before  the  Commission  showed 
that  the  coal  industry  In  the  United  Kingdom  consisted 
of  3,300  mines,  owned  by  1,452  companies  or  individuals. 
Of  these,  434  owned  small  mines  producing  only  about 
2,000  tons  a  year  each.     The  larger  mines  were  about 

340 


1,000  in  number.  The  output  from  these  mines  in  millions 
of  tons  for  a  number  of  years  prior  to  and  during  the  war 
is  shown  in  the  following  table;  ^ 

OUTPUT    OF    COAL    MINES,    GREAT    BRITAIN,    I9O9-I918 


Year 


1909-1913  (average) 
1912-1913 

1914 

1915 

1916 

1917 

1918 


Output 
(Million  tons) 


270 

274 

266 

253 

256K 

248K 

226 


In  this  table  the  average  for  the  years  1909-1913  was 
computed  and  used  as  a  basis  for  comparison.  The  aver- 
age for  the  years  1912-1913  stood  somewhat  above  that 
for  the  five-year  period,  but  there  has  been  a  consistent 
decline  in  output  from  the  commencement  of  the  war. 
The  average  for  1918  is  lower  than  any  in  the  series. 

At  the  same  time  output  per  person  employed  had  also 
decreased.  The  position  as  stated  in  official  figures 
supplied  to  the  Commission  by  the  financial  adviser 
to  the  Coal  Controller  is  set  forth  in  the  following  table. 
While  these  figures  are  not  open  to  the  deduction  that  the 
coal  hewers  were  growing  less  and  less  efficient,  since 
the  output  is  measured  in  terms  of  all  the  persons  em- 
ployed in  the  industry,  they  do  give  an  impression  of 
the  increasing  labor  cost  that  fell  upon  each  ton  of  coal 
mined. 

OUTPUT  OF  COAL  MINES,  GREAT  BRITAIN,  SELECTED  YEARS 
FROM  1889  TO  191 8  EXPRESSED  IN  TONS  PER  PERSON 
EMPLOYED 


Years 


Tons  per  person 
employed 


1889-1893  (average)  .  .  . 
1899-1903    "    .  .  . 

1907 

1908 

1909 

1910 

1914 

1915 

1916 

1917 

1918  (first  six  months) . 

1918  (third  quarter)      . 


282 
288 
289 
269 
266 
257 
252 
270 
260 
247 
245 
235 


1  The  Labour  Gazette,  June,  1919,  p.  225. 

347 


As  a  result  of  increased  wages  and  decreased  relative 
output  the  labor  cost  per  ton  of  coal  mined  had  increased 
greatly.  Sir  Richard  Redmayne,  Chief  Inspector  of 
Mines,  gave  official  figures  to  show  that  the  wage  cost 
per  ton  in  1913  was  6  shillings  and  4  pence,  but  in  the 
third  quarter  of  1918  it  had  risen  to  14  shillings  4^/2 
pence.  The  Sankey  Interim  Report  contains  an  appendix 
with  a  table  showing  the  various  items  of  cost  and  profit 
on  a  ton  of  Derbyshire  coal.  The  wage  item  contained 
therein  is  13  shillings  5  pence,  representing  nearly  64  per 
cent  of  the  cost  of  the  coal  at  the  pit-mouth. 

The  chief  item  in  this  increase  has  been  the  increases  in 
wages  paid  to  miners  since  the  war  began.  In  May,  1915, 
they  were  granted  a  war  bonus  varying  from  10  per  cent 
to  20  per  cent  according  to  local  conditions.  In  July, 
1915,  they  obtained  a  new  standard  scale  as  a  minimum, 
with  bonuses  on  wages  paid  in  May  of  that  year  ranging 
from  15}/^  per  cent  to  18^  per  cent.  These  bonuses  were 
followed  by  further  increases  later  in  the  year.  In  1916 
the  hewers  of  Northumberland  obtained  an  advance  of 
48  per  cent,  in  Durham  321/2  P^^  cent,  in  the  Midlands 
83^2  pcJ"  cent,  in  Scotland  313<4  per  cent,  and  in  Wales  30 
per  cent.  In  1917  the  Controller  of  Coal  Mines  granted 
a  war  bonus  of  1  shilling  6  pence  per  day  for  workers  over 
sixteen  years  of  age.  In  1918  another  advance  was  made, 
exactly  equal  to  that  given  in  1917,  namely,  1  shilling 
6  pence  per  day  for  workers  over  sixteen  years  of  age.  The 
total  of  these  increases  is  reckoned  at  18  shillings  per  week. 

No  official  figures  of  actual  wages  paid  were  put  before 
the  Commission.  Mr.  Vernon  Hartshorn,  M.P.,  and  a 
representative  o  the  miners  of  South  Wales,  repeated 
before  the  Commission  what  he  had  asserted  in  Parlia- 
ment: 

The  pre-war  wages  of  the  day-wage  men  in  South  Wales 
were  as  follows: 

21,693  with  an  average  weekly  wage  of  2Qs.  9>d. 
11,300  with  an  average  weekly  wage  of  29/.  6cf. 
22,717  with  an  average  weekly  wage  of  31/.  lO^^. 

Ovei  80  per  cent  of  the  day-wage  workers  got  less  than  32/.  a 
week.  There  were  only  12,283  getting  above  32/.  a  week, 
and  about  1,200  out  of  a  total  of  nearly  69,000  who  got  over 
£2  a  week.  The  average  for  day-wage  men  worked  out  at  30/ 
I  Or/,  per  week. 

348 


So  far  as  pieceworkers  were  concerned,  there  were 

21,792  hewers  whose  average  wage  was  36i-.  8^. 
10,519  hewers  whose  average  wage  was  39j.  Zd. 
12,886  hewers  whose  average  wage  was  4:5s.  Qd. 
10,972  hewers  whose  average  wage  was  52s.  lOd. 

making  88.8  per  cent  of  the  total. 

Only216  out  of  the  whole  of  the  pieceworkers  were  earning 
more  than  £1  a  day.  The  average  weekly  wage  worked  out 
£2  5/.,  and  the  average  for  all  underground  workmen  over 
twenty-one  years  of  age  at  37s.  9d.  a  week. 

The  general  average  increase  in  wages  during  the  war  for 
mine  workers  in  South  Wales  was  86.4  per  cent,  and  for  the 
whole  country  the  average  advance  was  81  per  cent.^ 

Evidence  from  outside  the  Commission  is  furnished 
by  a  Lancashire  mine  owner  who  had  been  called  upon  by 
the  Coal  Controller  to  furnish  exact  particulars  of  the 
average  earnings  of  all  his  employees  during  June  and 
November,  respectively,  in  the  years  1913-1918,  with  the 
exception  of  1915.  The  table  was  published  in  The  Times'^ 
and  is  reproduced  on  page  350. 

The  average  annual  earnings  of  all  colliery  workers, 
both  men  and  boys,  as  accepted  by  the  Commission,  were, 
for  the  year  1913,  £82  a  year,  and  on  the  basis  of  the 
September  quarter  of  1918,  at  the  rate  of  £169  a  year,  an 
increase  of  106  per  cent.  It  should  be  added  that  the 
cost  of  living  during  the  same  period  had  advanced  120 
per  cent. 

Along  with  these  increases  in  wages  had  gone  increases 
in  the  price  of  coal  at  the  pit-mouth.  By  the  Price  of 
Coal  (Limitation)  Act,  1915,  an  advance  was  sanctioned 
but  limited  to  4  shillings  per  ton  above  the  price 
prevailing  at  corresponding  dates  in  the  twelve  months 
preceding  June  30,  1914.  In  July,  1916,  a  further  advance 
of  2  shillings  6  pence  per  ton  occurred.  In  October, 
1917,  following  an  increase  in  wages  given  to  the  miners, 
the  pit-head  price  of  coal  was  advanced  2  shillings  6  pence 
per  ton.  In  June,  1918,  an  advance  in  price  occurred  of 
2  shillings  6  pence  per  ton  to  cover  the  increased  wage 
granted.  The  sum  total  of  these  advances  increased  the 
cost  of  coal  at  the  pit-mouth  from  about  10  shillings  in 
1914  to  24  shillings  10  pence  in  September,  1918.     The 

1  The  Times,  March  17,  1919. 

2  Ibid.,  February  18,  1919. 

349 


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average  selling  price  in  London  in  1914  was  25  shillings 
6  pence  a  ton,  while  the  controlled  public  price  in  1918  was 
43  shillings  6  pence. 

Much  stress  was  laid  in  the  evidence  before  the  Com- 
mission on  the  profits  earned  by  the  industry  before  the 
war.  It  was  sought  to  show  that  the  industry  was  pro- 
fitable enough  to  bear  the  added  cost  of  the  higher 
standard  of  living  that  the  miners  were  demanding.  The 
figures  indicated  that  the  profits  were  very  great.  Mr. 
Arthur  Lowes  Dickinson,  financial  adviser  to  the  Coal 
Controller,  put  in  a  table  showing  net  profits  of  coal 
mines  after  deducting  depreciation  and  royalties.  This 
revealed  the  following  amounts  in  millions,  together 
with  the  profit  per  ton. 


PROFITS    OF    COAL    MINES,    EXCLUDING    DEPRECIATION    AND 
ROYALTIES,   I909-I918 


Profits 

Year 

In  Million  Pounds 

Per  Ton 

1909-1913    

13 

18K 
15>^ 

38K 
27K 
39* 

s.     d. 
1 

1912-1913    

1     4i^ 

1914 

1915 

1916 

1917 

1918  (third  quarter)       

1    VA 

1  8 

2  11 

2  2^ 

3  6>^* 

♦Calculated  on  a  yearly  basis. 

The  gross  profits  of  the  whole  industry,  including  coke 
and  by-products,  were  demonstrated  to  have  increased 
greatly  during  the  war.  Mr.  Ernest  Clark,  of  the  Board 
of  Inland  Revenue,  placed  before  the  Commission  the 
figures  supplied  to  the  Income  Tax  Commissioners  for 
the  assessment  of  income  tax  and  excess  profits  duty. 
The  total  profits  of  the  whole  industry  of  coal  and  its 
by-products,  subject  to  deductions  for  interest,  royalties, 
excess  profit  duty,  coal  mine  excess  payments  and  general 
taxation,  for  the  years  1914-1917,  were  given  as  follows: 


1914 

£20,687,000 

1915 

33,888,000 

1916 

50,546,000 

1917 

37,081,000 

351 

After  deducting  royalties,  profits,  and  interest  subject  to 
taxation,  the  following  profits  remained  in  the  industry, 
expressed  in  million  pounds,  and  as  a  figure  per  ton  of 
coal  mined: 

1914  £14,889,000  equal  to  Is.  Id.  per  ton 

1915  28,245,000  equal  to  2s.  M.  per  ton 

1916  44,376,000  equal  to  3j.  M.  per  ton 

1917  31,260,000  equal  to  2s.  Qd.  per  ton 

The  capitalization  of  the  industry  in  1914  was  equal  to 
£135,000,000.  But  a  large  part  of  the  profits  had  been 
reinvested,  for  the  capitalization  had  increased  till  in 
1917  it  was  £154,000,000. 

The  profits  of  the  industry  did  not  go  as  a  whole  to  the 
coal  owners.  Royalties  and  way-leaves  were  paid  to  the 
owners  of  colliery  land  as  follows: 


1914 

£5,898,000 

1915 

9,743,000 

1916 

6,270,000 

1917 

5,921,000 

Further,  the  Income  Tax  Commissioners,  in  terms  of  the 
Excess  Profits  Duty,  took  80  per  cent  of  the  excess  profits 
above  the  average  of  any  two  out  of  the  three  years 
preceding  the  war,  while  of  the  remainder,  the  Coal 
Controller  took  three-fourths,  leaving  only  5  per  cent  of 
the  excess  profits  to  the  owners.  On  this  basis,  however, 
as  the  official  figures  of  the  Board  of  Inland  Revenue 
showed,  the  percentage  of  profits  on  the  estimated  capital 
was: 

1914  11   per  cent 

1915  18.7  per  cent 

1916  22.5  per  cent 

1917  17.2  per  cent 

Nor  were  all  coal  concerns  equally  profitable.  Evidence 
was  given  by  the  Financial  Adviser  to  the  Coal  Controller, 
showing  that  31  per  cent  of  the  collieries  produced  62  per 
cent  of  the  output  at  a  profit,  while  15  per  cent  of  the 
collieries  produced  13  per  cent  of  the  output  at  a  loss.  In 
later  evidence  he  presented  a  summary  of  colliery  returns 
for  the  months  of  November  and  December,  1917, 
comprising  75  per  cent  of  tlic  total  tonnage,  showing  the 
collieries  making  profits  and  those  making  losses.  The 
number  of  collieries  in  the  first  list  was  double  that  in  the 

352 


second,  but  their  output  was  nearly  five  times  as  great. 
The  average  profit  per  ton  realized  was  2  shillings  3  pence, 
the  average  loss  per  ton  was  a  little  over  2  shillings.  Loss 
fell  most  heavily  on  South  Wales,  where  the  output  realized 
at  a  loss  was  58  per  cent  of  that  realized  at  a  profit,  the 
amount  of  loss  in  shillings  per  ton  being  heavy. 

It  should  be  observed  that  the  amount  of  15  per  cent  of 
the  excess  profits  which  the  Coal  Controller  retained  was 
used  to  compensate  the  owners,  who  were  compelled  to 
produce  at  a  loss,  and  that  the  advance  in  price  made  in 
1918,  which  was  entirely  unprompted  by  either  statistical 
or  actuarial  calculations  was  used  to  bring  mines  which 
were  not  yielding  a  profit  up  to  the  profit-yielding  margin. 
It  should  be  noted  that  this  was  an  endeavor  to  fix  the 
price  of  coal  by  the  cost  of  production  of  the  least  efficient 
mines,  with  the  result  of  larger  profits  to  the  more  efficient 
and  added  cost  to  the  consuming  public.  The  action  was 
held  to  be  justified  on  the  ground  that  the  nation  required 
every  ton  of  coal  that  was  obtainable,  and  to  that  end  the 
mines  which  were  heavily  handicapped  must  be  made 
profitable. 

The  bulk  of  these  profits  seems  to  have  been  obtained 
from  the  export  trade  in  coal.  A  table  put  in  as  evidence 
by  the  financial  adviser  to  the  Coal  Controller  showed 
both  the  relative  size  and  profit  of  the  domestic  and 
export  trade  for  three-quarters  of  the  year  1918.  The 
table  follows: 


COMPARISON  OF  PROFITS  IN  EXPORT  TRADE  IN  COAL,  GREAT 
BRITAIN,  QUARTERS  ENDING  MARCH,  JUNE,  SEPTEMBER, 
I918 


Quarter  ending 
Mar.  31,  1918 


Quarter  ending 
June  30.  1918 


Quarter  ending 
Sept.  30,  1918 


Tons  of  coal  sold  inland    .    .    . 
Tons  of  coal  sold  for  export 
Profits  per  ton  on  domestic  coal 
Profit  per  ton  on  exported  coal 


31,069,341 
9,217,210 

8Md. 
6s.  Q.8d. 


28,073,037 

9,911,600 

IMd. 

7s.  Q.35d. 


22,822,169 
9,750,214 
l.f.  6.57 J. 

10s.  O.SSd. 


While  no  fuller  examination  was  made  of  the  foreign 
trade  in  coal,  it  was  demonstrated  that  the  coal  industry 
itself  depended  on  this  foreign  trade.  Its  loss  would 
have  far-reaching  eff^ects.  Coal  owners  were  very  nervous 
about  American  competition  and  the  inroads  American 

353 


coal  exporters  had  made  into  markets  formerly  supplied 
by  Great  Britain.  Referring  to  Brazil,  Argentina,  and 
Uruguay,  a  witness  gave  the  following  figures  of  the 
United  States  shipments  of  coal  to  those  countries: 

Year  ended  June  30,  1910  96,000  tons 

Year  ended  June  30,  1914  440,000  tons 

Year  ended  June  30,  1915  1,195,000  tons 

Year  ended  June  30,  1916  1,619,000  tons 

While  the  trade  of  the  United  States  with  those  coun- 
tries was  increasing,  that  of  Great  Britain  was  declining. 
The  same  witness  cited  the  following  figures  as  the  exports 
of  Great  Britain  to  the  same  three  countries  during  the 
years  1913-1916: 

1913  6,304,000  tons 

1914  4,611,000  tons 

1915  2,449,000  tons 

1916  1,105,000  tons 

More  serious  was  the  entrance  of  American  coal  into 
Europe.  In  1912  the  exports  of  Great  Britain  into  the 
South  American  countries  just  named  formed  9  per  cent 
only  of  her  total  exports,  while  her  European  and  Medi- 
terranean markets  took  over  87  per  cent  of  the  total.  The 
quantity  exported  to  French  or  Mediterranean  ports  was 
31,132,000  tons.^  But  America  was  opening  up  trade 
with  Italy.  Her  exports  to  that  country  were  estimated 
by  witness  as  follows : 

EXPORTS    OF    COAL    FROM  U.    S.    A.    TO    ITALY,     I9II-I917. 

1911  312,754  tons 

1912  339,064  " 

1913  486,040  " 

1914  693,140  " 

1915  2,839,979  " 

1916  1,069,877  " 

1917  393,000  " 

These  figures  show  how  marked  had  been  the  increase 
in  the  quantity  bought  by  Italy  during  the  war  period 
till  the  submarine  war  made  shipping  scarce  in  1917. 
Coal  had  also  gone  from  the  United  States  to  Sweden  and 
Spain.  The  total  amount  exported  to  all  European 
countries  ivoni  the  United  States  was  estimated  as 
follows: 

1913  about     727,000  tons 

1914  about     914,000  tons 

1915  about  3,442,000  tons 

'  Sec  II.  Stanley  Jevons:  "The  Coal  Trade,"  pji.  082-84. 

354 


The  United  States  .  .  .  was  going  ahead  rapidly.  She  had 
increased  her  output  enormously,  possessed  cheap  coal,  had 
now  a  large  fleet  of  steamers,  and  was  desiring  new  outlets 
for  her  increased  output.  .  .  .  She  was  now  offering  coal 
in  the  European  markets,  and  was  assisted  by  the  fear  in  the 
minds  of  many  of  the  buyers  that  there  would  not  be 
sufficient  British  coal  to  supply  their  needs. 

Another  witness  gave  evidence  on  American  competi- 
tion in  South  America: 

There  was  considerable  prejudice  against  American  coal, 
owing  to  its  appearance,  it  being  small  and  friable,  but  when 
shipments  from  the  United  Kingdom  became  difficult  and 
almost  ceased,  consumers  were  obliged  to  take  American 
coal,  and  they  soon  discovered  that  it  was  nearly  as  efficient 
as  second-class  Welsh  Admiralty  coal  for  steam-raising 
purposes. 

During  the  war  the  Americans  made  every  effort  to  send 
coals  to  South  America,  and  they  succeeded  to  a  remarkable 
degree.  Since  the  armistice  and,  indeed,  before  the  armistice 
was  signed,  very  great  efforts  were  being  made  by  American 
shippers  to  obtain  orders  for  coals,  and  a  great  many  contracts 
had  been  entered  into.  Shippers  of  British  coals  were,  of 
course,  not  in  a  position  to  compete,  so  that  the  Americans  had 
obtained  a  firm  hold,  especially  in  Brazil. 

The  stress  laid  on  the  danger  to  Great  Britain's  export 
trade  in  coal  from  American  competition  led  to  many 
interesting  comparisons  and  contrasts  with  coal  production 
in  America,  Evidence  and  independent  observation 
revealed  great  and  significant  contrasts.  The  output  of 
coal  in  the  United  States  is  so  much  greater  that  com- 
parisons of  quantity  are  invalid.  The  United  States 
has  one-half  the  available  coal  supply  of  the  whole  world. 
But  comparisons  in  output  per  individual  are  valid.  Here 
one  finds  that  the  output  over  a  length  of  time  had  been 
growing  only  2  per  cent  per  year  in  Great  Britain,  4  per 
cent  in  Germany  before  the  war,  and  6  per  cent  in  America. 
This  disparity  in  increase  of  production  was  not  due  to 
smaller  numbers  engaged.  Great  Britain  employed 
300,000  men  and  boys  more  than  the  United  States,  yet 
the  total  quantity  mined  in  America  in  1912  was  nearly 
twice  as  great.  Further,  the  output  per  ton  per  employee 
over  the  same  period  of  years  had  fallen  in  Great  Britain 
from  312  to  244  tons,  but  in  the  United  States  it  had 

355 


risen  from  400  to  660  gross  tons.^  In  Australia  and  New 
Zealand,  where  the  miners  were  of  the  same  type  and 
race  as  in  Great  Britain,  the  output  per  man  was  well 
over  500  tons.- 

The  reasons  for  this  low  output^  lend  reality  to  the  coal 
situation  in  Great  Britain.  Coal  is  scarcer  in  that  country 
than  in  the  United  States  of  America.  It  has  been 
worked  for  a  longer  time,  and  some  of  the  most  easily 
available  seams  are  exhausted.  The  coal  face  has  receded 
from  the  shafts  first  put  down,  so  that  coal  is  now  more 
costly  and  difficult  to  get.  Shafts  are  growing  deeper. 
As  a  consequence  of  these  two  facts,  and  of  the  absence 
of  mechanical  haulage,  the  management  has  difficulties 
in  furnishing  a  constant  supply  of  trucks  to  carry  off  the 
coal  produced  by  the  miners.^ 

Further,  the  nature  of  the  seams  and  the  geological 
difficulties  experienced  militate  against  increased  output. 
Narrow  seams,  only  16,  20  and  30  inches  wide,  are  worked 
in  many  cases.  The  anthracite  miners  in  South  Wales 
are  continually  struggling  against  "faults,"  and  their 
output  is  seriously  reduced  and  the  cost  of  production 
increased  thereby.  The  following  note  on  the  Welsh 
coal  fields,  the  richest  and  yet  (as  shown  earlier)^  the 
most  unprofitable  of  the  English  deposits,  will  show  the 
realities  of  the  situation: 

"Geologically,  the  strata  are  more  disturbed  than  those 
of  any  other  British  coal  field.  Besides  the  frequent  'faults,' 
i.e.,  actual  fractures  or  displacements  of  the  strata,  there  are 
also  'washouts'  where  the  coal  becomes  very  thin  or  dis- 
appears altogether  for  a  few  yards  without  there  being 
any  'fault.'  In  the  anthracite  area  this  disturbed  condition 
is  generally  so  serious  as  to  render  it  difficult  to  work  the  coal 
on  a  very  large  scale,  that  is,  in  pits  employing  anything 
approaching  the  numbers  of  men  employed  in  the  steam 
coal  collieries.     It  also  renders  operations  in  this  area  more 

^  Data  furnished  by  U.  S.  Geological  Survey  place  average  tonnage  per  man 
in  1914  at  673  (short)  tons.  Quoted  in  Coal-Mine  Fatalities  in  the  United 
States,  1918,  compiled  by  Albert  H.  Fay,  U.  S.  Department  of  tlie  Interior, 
Washington,    1919. 

^  For  the  comparisons  made  in  this  and  preceding  paragraph,  see  Sydney 
Brooks:    "Some  Problems  of  Coal,"  Nineteenth  Century,  March,  1919. 

'This  discussion  does  not  refer  to  the  reduction  in  output  per  man  during 
the  war  period,  which  was  explained  by  Sir  Richard  Redmayne  as  due  largely 
to  the  withdrawal  of  4(K),()(M)  men  for  military  service.  "They  constituted 
the  fittest  possible  men  in  the  mines,  and  their  places  were  taken  very  largely 
by  men  of  lower  physical  standard." 

*  See  H.  Stanley  Jcvons:  "The  Coal  Trade"  (1915). 

»  See  p.  ■.i'i.i. 

356 


speculative  and  the  adoption  of  standardized  rates  of  wages 
more    difficult    than    elsewhere.     Next,    the    character    and 
quality  of  much  of  this  South  Wales  coal  give  it  a  practical 
monopoly  in  the  markets  to  which  the  bulk  of  it  is  dispatched. 
Thus,  the  best  steam  coal,  so  essential  for  the  navy,  is  abso- 
lutely unrivaled  in  any  part  of  the  world;  the  best  bituminous 
coals  owing  to  their  hardness,  can  stand  all  kinds  of  climates, 
while  the  anthracite  coal  of  the  west  has  no  serious  rival  any- 
where except  that  of  Pennsylvania.     Now  'the  same  causes 
which  have  given  Welsh  coals  their  superiority  are  also  re- 
sponsible for  having   made   mining  in   this   coal  field   more 
costly  and  more  dangerous  than  in  the  other  coal  fields  of  the 
United  Kingdom.     The  Welsh  coal  is  dry  and  fiery,  and  owing 
to  the  dryness  of  most  of  the  mines  the  fine  coal  dust  is  a  con- 
stant   source    of   danger.     Loose-jointed    coal    and    loose    or 
rotten  roof  are  also  more  frequent  in  South  Wales  than  else- 
where,   so    that    there    are    numerous    accidents,    frequently 
fatal,  from  falls  of  the  face  of  coal,  as  well  as  from  falls  of  the 
roof.'  "  ' 
Some  of  this  difference  in  output  must  also  be  credited 
to  the  fact  that  mechanical  coal  cutters  have  not  as  great 
a  vogue  as  in  the  United  States.     The  following  tabular 
statement  of  the   position   was   presented   to  the   Com- 
mission  by   Sir  Richard  Redmayne,   Chief  Inspector  of 
Mines: 


ANNUAL  GROWTH  IN  THE  USE  OF  MECHANICAL  COAL 
CUTTERS  AND  COAL  OBTAINED  THEREBY,  UNITED  KING- 
DOM  I9O3-I917,  U.  S.  A.   I903-I916 


United  Kingdom 

United  States 

No.  Machines 

Tons  Mined 

No.  Machines 

Tons  Bituminous 
Coal  Mined 

1903 

643 

5,245,578 

6,658 

69,620,441 

1904 

755 

5,744,044 

7,671 

70,261,158 

1905 

946 

8,102,197 

9,184 

92.318,261 

1906 

1,136 

10,202,506 

10,212 

106,113,863 

1907 

1,493 

12,877,244 

11,144 

123,703,413 

1908 

1,659 

13,508,510 

11,569 

109,985,120 

1909 

1,691 

13,728,902 

13,049 

127,229,355 

1910 

1,959 

15.747,558 

13,254 

155,368,119 

1911 

2,146 

18,309,269 

13,819 

159,068,961 

1912 

2,444 

20,053,082 

15,298 

187,981,091 

1913 

1,897 

24,369,516 

16,379 

216,447,958 

1914 

3,093 

23,976,367 

16,507 

194,999,363 

1915 

3,089 

24,087,684 

15,692 

217,176,385 

1916 

3,459 

26,303,110 

16,197 

253,295,960 

1917 

3,799 

27,626,298 

(Not  av 

ailable) 

^  See  Report  of  Commission  of  Inquiry  into  Industrial  Unrest,  Great  Britain- 
U.  S.  Bureau  of  Labor  Statistics  Bulletin,  No.  237. 

357 


The  significance  of  this  table  is  increased  when  one 
uses  comparative  figures.  The  average  production  in 
Great  Britain  for  1912-1913'  was  274  million  tons,  of 
which  an  average  of  only  22  million  tons,  or  8  per  cent, 
was  obtained  by  the  use  of  coal-cutting  machinery.  The 
figure  for  the  number  of  tons  mined  by  machinery  in 
1917  was  only  10  per  cent  of  a  normal  year's  output.  On 
the  other  hand,  the  amount  of  bituminous  coal  cut  in 
the  United  States  in  1914,  the  only  year  for  which  figures 
are  readily  available,  was  51.7  per  cent  of  the  total. '^ 
A  less  reliable  estimate  for  1912  shows  a  figure  of  about 
40  per  cent.^ 

Independent  observation^  revealed  other  points  of 
contrast  with  America.  In  one  of  the  best-equipped 
collieries  in  South  Wales  the  main  haulage  was  done  by 
cable  which  was  nearly  two  miles  long.  In  America 
electric  motors  would  have  been  used.  At  the  dockside, 
where  coal  is  brought  for  export,  one  is  struck  by  the 
large  number  of  men  employed  instead  of  labor-saving 
machinery  being  used.  Prior  to  the  war  labor  was  too 
cheap  in  Great  Britain.  If  more  work  or  more  production 
was  needed  it  cost  the  employer  less  to  hire  a  few  more 
men  than  to  put  in  labor-saving  machinery,  while  the 
objections  of  the  workers  to  that  machinery  supplied 
him  with  a  stimulus  in  the  same  direction.  Docking 
accommodation  at  Cardiff  was  antiquated,  and  docks 
were  badly  laid  out.  For  instance,  the  railroad  tracks 
reached  the  pier  at  right  angles  to  the  line  of  docks.  This 
necessitated  every  railroad  wagon  being  put  on  a  turn- 
table and  turned  around,  an  operation  which  was  per- 
formed by  hand  labor.  The  export  trade  was  obviously 
loaded  with  an  added  burden  of  cost  by  such  uneconomical 
unloading  facilities. 

The  same  absence  of  economy  was  observed  in  the 
haulage  of  coal.  Most  railroad  coal  cars  have  a  net 
capacity  of  ten  to  twelve  tons,  with  a  "tare"  of  above  50 
per  cent  of  the  net  loading  of  the  wagons.  Most  of  the 
liauls  are  for  a  short  distance  only.  The  average  length 
f)f  luiiil  in  Soulh  Wales   was   from    twenty  to  twenty-five 

'  Sec  Tabic,  p  :',\7. 

"Department  of  tlic  Iiilcrior,  U.  S.  A.  I'mllL-tin  llf),  p.  1,S7. 

^  Ibid.,  pp.  120,  ]23,  120,  129. 

*  By  S.  I'cmhcrton  llutcliinson,  Pifsidcnt,  Wcstmorclaiul  Coal  Company, 
a  member  of  the  Kuropean  Commission  of  the  National  Industrial  Conference 
Board. 

358 


miles,  while  in  the  distribution  of  domestic  coal,  short 
haulage  preponderated.  This  shorter  haulage  increases 
the  proportion  of  cost  per  ton  per  mile  relatively  to  the 
cost  of  the  longer  hauls  in  the  United  States,  a  disadvan- 
tage from  which  Great  Britain  cannot  escape.  But  a 
great  economy  would  be  effected  in  the  handling  of  coal 
if  larger  cars  and  longer  trains  were  used.  It  must  be 
recognized,  however,  that  such  alterations  would  involve 
a  great  expenditure  of  money  on  tunnels,  bridges,  plat- 
forms, and  so  forth.  The  substitution  of  larger  cars, 
further,  would  involve  a  complete  change  in  the  handling 
equipment  of  the  docks. 

It  should  be  stated  that  the  North-Eastern  Railway, 
which  serves  the  Durham  field,  has  sought  to  better  its 
handling  capacity  by  building  trucks  of  thirty  to  forty 
tons  capacity,  and  has  experimented  with  electric  haulage 
for  mineral  trafhc.  The  docks  at  Newcastle  and  South 
Shields  are  fitted  with  elaborate  and  gigantic  tips  and 
cranes.^ 

The  contrast  between  the  United  States  and  Great 
Britain  reveals  the  great  difficulties  the  coal  industry 
in  the  latter  country  has  in  competing  with  the  former. 
Many  of  these  difficulties,  as  suggested  above,  are  inherent 
in  the  very  situation.  This  is  particularly  true  in  the 
matter  of  coal-cutting  machinery.  The  conditions  pre- 
senting difficulty  under  this  head  were  summarized  by 
the  Royal  Commission  on  Coal  Supplies,  1905:^ 

"There  are,  however,  certain  conditions  under  which 
machines  cannot  at  present  be  worked  to  advantage,  viz.,(l) 
where  the  roof  or  floor  is  bad,  (2)  where  there  are  numerous 
faults  or  dykes,  or  (3)  where  the  seams  are  highly  inclined. 
So,  too,  in  the  case  of  very  soft  coal  there  is  the  danger  of  falls 
from  the  face  and  damage  to  the  machines." 

As  Sir  Richard  Redmayne  reminded  the  Commission, 
mechanical  coal  cutters  could  not  be  supplied  broadcast. 
They  could  not  be  used  in  South  Wales,  and  the  old  and 
nearly  exhausted  fields  of  Durham  and  Northumberland 
do  not  employ  them.  On  the  other  hand,  in  the  coal 
fields  of  Yorkshire  and  the  Midlands  the  undisturbed 
nature  of  the  coal  measures  is  very  favorable  to  the  em- 
ployment of  machines  and  the  newer  mines  are  adopting 
them  extensively. 

^  H.  Stanley  Jevons:  "British  Coal  Trade,"  p.  61. 
2  Ibid.,  p.  213. 

359 


Their  use  is  recommended  also  by  every  kind  of 
economic  advantage.  Under  present  conditions  of  the 
high  price  of  coal  they  would  cheapen  production,  since 
machine  work  is  less  costly  than  handwork,  even  in  thin 
seams.  They  have  advantages  of  a  technical  kind  in  the 
working  of  the  mines  and  in  producing  a  larger  proportion 
of  vendible  coal. 

Whether  their  introduction  in  larger  numbers  would 
be  welcomed  by  organized  labor  is  not  clear.  The  figures 
show  that  while  miners  were  volunteering  for  the  war  to 
the  number  of  300,000,^  coal-cutting  machines  were 
being  introduced  in  large  numbers.  During  the  period 
1909-1913,  the  years  chosen  for  the  estimate  of  output 
by  the  Commission,  the  average  number  of  machines  in 
use  was  a  little  over  2,000.  In  1914  it  was  3,093;  in 
1917,  3,799.  The  chief  miners'  witness,  Mr.  William 
Straker,  secretary  of  the  Northumberland  Miners'  Associa- 
tion, recognized  their  advantage  in  increasing  output. 

"Where  coal-cutting  machines  had  been  introduced,  he 
thought  it  was  safe  to  say  that  the  output  per  man  on  the  coal 
face  had  been  at  least  doubled."^ 

On  the  other  hand,  coal  owners  gave  positive  evidence 
concerning  the  dislike  of  the  miners  to  such  machinery.^ 

"If  the  workmen's  antagonism  to  machinery  could  be  got 
over,  probably  a  slight  increase  might  be  brought  about 
by  the  introduction  of  further  coal-cutting  machinery  and  the 
use  of  conveyers  in  thin  seams. 

"The  men  had  not  always  been  prepared  to  meet  the  owners 
when  machinery  had  been  introduced,  and  the  output  had 
consequently  not  improved  as  it  otherwise  would  have  done. 

"The  miners  had  not  helped  in  the  past  to  increase  produc- 
tion by  the  introduction  of  mechanical  appliances. 

"The  workers  were  against  the  use  of  conveyers.  I  am 
tolerably  safe  in  saying  we  have  more  conveyers  on  the  scrap 
heap  than  in  the  pit.  We  have  done  our  best  to  work  them. 
When  I  have  put  in  coal  conveyers,  the  men  have  not  tried  to 
make  them  successful." 

The  minority  report  presented  by  the  coal  owners  on 
March  20,  1919,  contained  the  following  reference:* 

•  This  is  the  figure  for  voliinlccrs.  Ultimately  another  100,000  were  obtained 
by  "combing  out." 

2  The  Times,  March  15,  1019,  p.  (i. 
a  The  Times,  March  13,  14,  1919. 

*  Interim  Report  by  Messrs.  Cooper,  Forgie,  and  Williams,  p.  6. 

360 


"It  was  alleged  that  in  the  past  the  workmen  had  in 'some 
districts  not  assisted  in  making  coal-cutting  machinery  and 
conveyers  a  success,  but  rather  the  contrary." 

Evidence  was  also  given  showing  that  a  large  measure 
of  reduced  output  was  due  to  voluntary  absenteeism. 
This  was  put  as  a  maximum  before  the  war  at  from  12  to 
15  per  cent,  and  9  per  cent  during  the  war.  An  estimate 
was  given  several  times  that  5  per  cent  of  this  absenteeism 
was  avoidable,  and  that  reduced  hours  of  working  would 
eliminate  some  of  it. 

Much  attention  was  paid  during  the  inquiry  to  the 
subject  of  housing.  The  Sankey  Report,  which  was 
accepted  by  the  Government  "in  the  spirit  as  well  as 
in  the  letter,"  reached  the  following  conclusion  and 
recommendation  on  this  point: 

Although  it  is  true  that  there  is  good  housing  accommoda- 
tion in  certain  districts — and  to  some  extent — there  are 
houses  in  some  districts  which  are  a  reproach  to  our  civiliza- 
tion. No  judicial  language  is  sufficiently  strong  or  sufficiently 
severe  to  apply  to  their  condemnation. 

It  is  a  matter  for  careful  consideration  whether  Id.  per  ton 
should  not  be  at  once  collected  on  coal  raised  and  applied  to 
improve  the  housing  and  amenities  of  each  particular  colliery 
district.  A  penny  per  ton  on  our  present  output  means 
about  £1,000,000  a  year. 

The  housing  conditions  within  the  mining  Industry  vary 
in  accordance  with  districts  and  district  customs.  Thus, 
In  the  older  and  almost  exhausted  fields  of  Durham  and 
Northumberland,  "the  dwellings  of  the  people  are  old 
and  insanitary,"^  but  the  fact  of  the  approaching  exhaus- 
tion of  the  coal  and  the  absence  of  any  Industry  to  take 
its  place  has  Impeded  any  effort  to  remedy  this  state 
of  things.  The  conditions  in  Scotland  came  In  for  much 
condemnation.  There  the  colliery  companies  own  the 
bulk  of  miners'  cottages.  The  prevailing  type  of  cottage 
is  of  a  low  order,  and  makes  but  scanty  provision  for 
ventilation,  heat,  decency,  or  sanitation.  In  Yorkshire, 
however,  conditions  are  somewhat  better. 

Although  its  housing  accommodation  is  not,  in  most  parts, 
actually  deficient,  the  cottages  are  usually  only  small  brick 
boxes  put  up  in  monotonous  rows  by  jerry-builders.  The 
miners  live  in  dirty,  ill-made,  noisy  streets,  under  a  murky 

^  H.  Stanley  Jevons:  "The  British  Coal  Trade,"  p.  63. 

361 


atmosphere;  and  many  of  the  cottages  being  built  back  to 
back  there  is  no  through  ventilation  and  no  privacy. 

The  housing  conditions  in  the  neighborhood  of  the  large 
new  pits  which  are  being  sunk  in  South  Yorkshire  are  being 
very  greatly  improved  by  the  movement  for  building  model 
colliery  villages  on  garden  city  lines/ 

The  houses  in  South  Wales,  while  described  by  a  com- 
petent authority  as  "not  at  all  satisfactory"^  are,  "taken 
as  a  whole,"  probably  better  now  than  in  any  of  the  other 
principal  coal  fields,  except  perhaps  the  new  South 
Yorkshire  field.  There  is,  however,  a  great  scarcity  of 
houses  due  to  the  fact  that  the  companies  do  not  build 
houses,  and  the  co-operative  building  clubs,  through 
which  the  miners  had  managed  to  build  their  own  houses, 
are  becoming  extinct. 

It  should  be  remembered  in  this  connection,  however, 
that  poor  housing  conditions  for  workmen  are  not  con- 
centrated in  any  industry  or,  for  that  matter,  in  any 
district.  Bad  conditions  may  be  found  in  various  parts 
of  England  and  in  various  industries.  The  slums  have 
for  many  years  been  a  part  of  England's  industrial 
development.  For  a  further  and  more  complete  dis- 
cussion of  this  point,  the  reader  is  referred  to  Chapter  XII. 

§  3.     Recommendations  of  the  Commissions 

On  the  basis  of  the  evidence  furnished  it,  the  Coal 
Commission  presented  its  report  on  March  20,  1919. 
Three  separate  reports  were  prepared.  The  coal  owners, 
three  in  number,  replied  to  the  request  of  the  miners 
for  30  per  cent  increase  in  wages  and  a  reduction  of  hours 
from  8  to  0  per  day,  with  a  recommendation  of  an  advance 
of  1  shilling  6  pence  per  day  and  a  reduction  of  hours  to 
7  per  day.  Representatives  of  the  miners,  three  of  whom 
were  members  of  the  executive  of  the  Miners'  Federation, 
and  three  others  —  economists  appointed  by  the  Govern- 
ment on  the  nomination  of  the  miners  —  to  watch  the 
workers'  interests  in  other  industries,  held  that  both 
claims  of  the  miners  were  justified.  The  third  report 
was  presented  by  the  Chairman  of  the  Commission,  Mr. 
Justice  Sankey,  and  the  tlirec  employers  named  by  the 
Government  on  behalf  of  other  industries.    This  Report, 

'II.  Stanley  Jcvons:  "British  Coal  Trade,"  p.  G3. 
^  Ibid.,  p.  120. 

362 


which  the  Government  adopted  and  the  miners  ultimately 
accepted,  recommended  an  increase  in  wages  of  two  shil- 
lings per  shift  or  per  day  worked,  and  a  reduction,  as  and 
from  July  16,  1919,  of  the  hours  of  labor  from  8  to  7,  and, 
"subject  to  the  economic  position  of  the  industry  at  the 
end  of  1920,"  to  6  hours  per  day  as  and  from  July  13, 
1921. 

The  demand  for  nationalization  was  accepted  by  the 
six  miners'  representatives.  The  two  other  groups  were 
unready  to  pronounce  judgment  on  the  subject,  which  had 
not  been  fully  discussed  before  the  Commission,  since 
precedence  had  been  given  to  the  questions  of  wages 
and  hours.  The  Sankey  Report,  however,  was  by  no 
means  neutral  in  regard  to  the  future  of  control  in  the 
industry,  as  the  following  sections  will  show: 

Even  upon  the  evidence  already  given,  the  present  system 
of  ownership  and  working  in  the  coal  industry  stands  con- 
demned, and  some  other  system  must  be  substituted  for  it, 
either  nationalization  or  a  method  of  unification  by  national 
purchase  and /or  by  joint  control. 

We  are  prepared,  however,  to  report  now  that  it  is  in  the 
interests  of  the  country  that  the  colliery  worker  shall  in  the 
future  have  an  effective  voice  in  the  direction  of  the  mine. 
For  a  generation  the  colliery  worker  has  been  educated  socially 
and  technically.  The  result  is  a  great  national  asset.  Why 
not  use  it? 

From  this  basis  these  Commissioners  proceeded  to 
report  that  economies  resulting  from  improved  methods 
should  result  in  the  industry  yielding  even  better  terms 
to  the  workers  than  those  recommended  in  the  Report, 
while  at  the  same  time  giving  a  fair  return  to  capital. 
The  result  of  the  colliery  workers  having  an  effective 
voice  in  the  direction  of  the  mine  and  better  wage  terms, 
should 

enable  them  to  reach  a  higher  standard  of  living  to  which, 
in  our  view,  they  are  entitled,  and  which  many  of  them  do  not 
now  enjoy. 

The  Sankey  Report  further  recommended  that  future 
sessions  of  the  Commission  should  deal  with  suggestions 
as  to  the  different  ways  in  which  economies  and  improve- 
ments in  the  coal  industry  could  be  effected,  and  that 
these  suggestions  should  be  carried  into  operation  and 
tested   through   the  machinery  of  the   Coal   Controller's 

363 


office,  the  continuance  of  which  was  also  recommended. 
At  the  same  time  these  Commissioners  urged  that 
certain  units  of  economy  and  units  of  improvement  should 
be  taken  in  hand  at  once.  The  following  were  named  as 
desirable  improvements  or  economies: 

(1)  Housing. 

(2)  Baths  at  the  pit-head. 

(3)  Clearance. 

(4)  Continuity  of  transport  from  the  colliery. 

(5)  Reduction  of  voluntary  absenteeism. 

(6)  Use  of  machinery  in  mines: 

(a)  Coal  cutting. 

(b)  Coal  conveying. 

(r)  Underground  transit. 

(7)  Pooling  of  wagons. 

(8)  Elimination  of  unnecessary  distribution  costs. 

(9)  Uniformity  of  accounting. 

The  Sankey  Interim  Report  was  endorsed  by  the 
Government  and  public  opinion  and  accepted  by  the 
miners.  Obviously  most  of  its  suggestions  were  experi- 
mental in  nature.  Their  success  depends  upon  securing 
economies  in  production  and  increasing  output.  The 
whole  of  the  evidence,  as  well  as  the  tenor  of  argument 
in  the  Report,  makes  this  clear.  The  Times,  in  an  editorial 
comment,  recognized  the  situation: 

The  proposals  relating  to  the  progressive  reorganization  of 
the  mining  industry  and  the  economies  which  it  is  expected 
to  effect  in  all  branches  of  the  industry  form  the  foundation 
of  the  whole  report.  If  these  economies  are  not  secured, 
the  whole  structure  collapses. 

In  this  extract.  The  Times,  which  said  that  the  report 

undoubtedly  marks  a  turning  point  in  the  industrial  system 
of  the  country, 

and  characterized  its  recommendation  on  control  of  the 
mines  as  "a  most  remarkable  pronouncement,"  acknow- 
ledged that  failure  to  increase  output  must  lead  to 
economic  disaster.  Yet,  with  the  optimism  characteristic 
of  the  British,  it  concluded  its  discussion  with  the  hope 
that  the  reorganization  of  the  industry  would  raise  the 
output  to  the  level  of  the  287  million  tons  produced  in 
1913.  Till  that  result  is  achieved,  the  action  recommended 
by  the  Sankey  Report  must  be  considered  an  experiment. 

364 


\ 


The  report  also  necessitated  a  further  inquiry  into  the 
question  of  nationalization,  which  was  not  definitely 
decided  in  the  earlier  report.  After  some  considerable 
delay,  due  to  the  miners'  ballot  on  the  acceptance  or  re- 
jection of  the  report,  the  Commission  commenced  an  in- 
vestigation of  the  question  of  nationalization  on  April  23d. 

The  terms  of  reference  of  this  second  inquiry  were  those 
set  out  in  certain  clauses  of  the  Coal  Industry  Com- 
mission Act,  1919,  the  chief  of  which  follow: 

(1)  Any  scheme  that  may  be  submitted  to  or  formulated 
by  the  Commissioners  for  the  future  organization  of  the  coal 
industry,  whether  on  the  present  basis,  or  on  the  basis  of 
joint  control,  nationalization,  or  any  other  basis; 

(2)  The  effect  of  the  present  incidence  of  and  practice  in 
regard  to  mining  royalties  and  way-leaves  upon  the  coal 
industry  and  the  cost  of  coal,  and  whether  any  and  what 
changes  in  these  respects  are  desirable; 

(3)  The  effect  of  proposals  under  the  above  heads  upon  the 
development  of  the  coal  industry  and  the  economic  life  of  the 
country. 

After  an  inquiry  lasting  nearly  two  months,  the  Com- 
mission issued  four  reports.  One  was  signed  by  the  Chair- 
man (Mr.  Justice  Sankey)  alone.  A  second  short  report 
was  signed  by  the  three  miners'  representatives  and  the 
three  who  were  nominated  on  their  behalf  by  the  Govern- 
ment. A  third  was  signed  by  the  three  coal  owners  and 
the  two  representatives  of  consumers'  interests.  The 
fourth  came  from  Sir  Arthur  Duckham,  the  third  repre- 
sentative of  the  consumers'  interests.  The  six  miners' 
representatives  finding  themselves  "in  substantial  agree- 
ment with  the  Chairman's  report,"  presented  only  a  short 
report  In  which  they  stated  their  disagreement  with  him 
on  minor  points.  Sir  Arthur  Duckham  differed  from  the 
coal  owners  and  other  manufacturers  more  in  his  method 
of  dealing  with  the  industry  in  the  future  than  In  his 
views  on  the  present  conditions  and  needs.  The  reports 
may,  therefore,  be  discussed  in  relation  to  the  general 
topic  of  this  section,  the  future  of  the  industry. 

A  distinction  exists  in  the  reports  between  the  future 
ownership  of  the  mineral  deposits  of  coal  and  the  future 
control  of  the  industry.  All  the  reports  agree  that  the 
private  ownership  of  coal  is  wasteful  and  nationally 
disadvantageous.     Sir  Arthur  Duckham  concludes,  with 

365 


reference  to  all  minerals,  that  private  ownership  "has 
not  been  and  is  not  in  the  best  interests  of  the  commun- 
ity." While  recognizing  that  the  great  development  of 
the  industry  has  been  due  to  private  enterprise,  he  admits 
that  "grave  losses  to  the  community  have  been  caused 
by  lack  of  co-ordination  in  the  efforts  of  private  enter- 
prise." Mr.  Justice  Sankey  names  several  respects  in 
which  private  ownership  is  held  to  have  hindered  the 
development  of  the  industry.  On  the  other  hand,  the 
coal  owners  and  their  two  co-signatories,  while  finding 
no  "reasonable  ground  for  preferring  state  ownership  of 
the  industry,"  yet  declare  for  state  ownership  of  the  coal 
deposits.  After  considering  the  difficulties  in  the  way 
of  full  utilization  of  the  national  resources  in  coal,  and 
"the  defects  arising  from  the  present  system  of  owner- 
ship," they  register  their  conclusion 

that  the  most  effective  method  of  dealing  with  the  problem 
in  the  national  interest  would  be  for  the  state  to  acquire  the 
ownership  of  the  coal. 

Under  state  ownership  there  would  be  one  owner  instead 
of  several  thousand  owners,  and  the  difficulties  caused  under 
the  present  system  will  be  effectively  dealt  with. 

On  the  matter  of  royalties,  all  are  agreed  that  they 
should  cease.  The  majority  are  in  favor  of  paying  a 
fair  valuation  for  these  rights.  The  three  officials  of  the 
Miners'  Federation,  however,  do  not  agree  to  any  com- 
pensation for  these  mineral  rights,  except  a  "grant  of 
compassionate  allowances  where  the  expropriation  would 
deprive  persons  of  their  means  of  livelihood." 

Though  the  majority  of  the  Commission  was  in  favor 
of  the  nationalization  of  the  industry,  the  objection  of 
the  coal  owners  and  manufacturers  was  decided  and  pro- 
nounced.    Sir  Arthur  Duckham  wrote: 

Many  advantages  have  been  claimed  for  nationalization; 
practically  none  has  been  sustained.  Many  cogent  objections 
have  been  advanced  against  nationalization,  the  majority 
of  which  have  not  been  refuted.  The  nationalization  of  the 
coal-mining  industry  would  be  an  unprecedented  and  colossal 
experiment. 

The  otlicr  owners  and  manufacturers  had 

come  to  the  conclusion  that  the  nationalization  of  the  coal 
industry  in  any  form  would  be  detrimental  to  the  development 
of  the  industry  and  to  the  economic  life  of  the  country. 

3G0 


Mr.  Justice  Sankey  recommended  that  the  principle  of 
state  ownership  of  the  coal  mines  be  accepted,  and  that 
Parliament  be  invited  to  pass  legislation  acquiring  the 
coal  mines  for  the  state  three  years  hence,  paying  fair  and 
just  compensation  to  the  owners.  His  report  on  this 
matter  was  accepted  without  qualification  by  the  six 
coal  miners'  representatives. 

The  adoption  of  the  principle  of  nationalization  in- 
volved some  form  of  Government  control.  In  accordance 
with  the  British  constitutional  system  this  necessitated 
a  Minister  of  Mines,  appointed  by  the  Government, 
sitting  in  and  responsible  to  Parliament.  Sir  Arthur 
Duckham's  scheme,  which  did  not  endorse  nationalization 
of  the  coal  mines,  yet  necessitated  a  Ministry  of  Mines 
to  have  control  and  oversight  of  all  mines.  So  the  owners' 
and  employers'  suggestions  of  the  state  ownership  of 
coal  called  for  a  Mines  Department,  which,  it  was  recom- 
mended, should  have  at  its  head  a  responsible  official 
thoroughly  acquainted  with  the  mining  industry. 

Political  control,  how^ever,  of  the  mines  was  objection- 
able to  the  owners.    Their  views  were  stated  thus: 

The  danger  due  to  political  influence  has  been  frankly 
admitted,  but  it  is  claimed  that  safeguards  can  be  provided 
against  political  interference  in  industry  or  commerce.  How- 
ever feasible  this  may  appear  in  theory,  the  democratic  system 
of  government  makes  safeguards  impossible  when  the  exi- 
gencies of  a  political  situation  dominate  a  question.  We  have, 
therefore,  come  to  the  conclusion  that  the  provision  of  safe- 
guards against  political  interference  is  not  within  the  region 
of  practical  politics. 

All  reports  agree  that  the  miners  should  be  given  some 
form  and  degree  of  representation  in  the  control  of  the 
industry.  Sir  John  Sankey  recognized  the  bases  of  this 
demand  on  the  part  of  the  miners.  Pie  pointed  out 
that  education  had  produced  this  "higher  ambition  of 
taking  their  due  share  and  interest  in  the  direction  of  the 
industry  to  the  success  of  which  they,  too,  are  contribut- 
ing." The  owners  reported  that  the  evidence  showed 
coal  owners  generally  were  prepared  to  increase  facilities 
for  the  workers  to  acquire  a  greater  knowledge  of  and 
interest  in  the  industry.  They  themselves,  in  common 
with  Mr.  Justice  Sankey,  put  forward  a  complete  scheme 
of  joint   representation   of   employers    and    miners.      Sir 

367 


Arthur    Duckham,    on    the    other    hand,    conceded    but 
limited  recognition  to  the  miners. 

Mr.  Justice  Sankey's  scheme  provided  for  a  system  of 
administration  for  the  miners  to  be  carried  on  during  the 
three  years  before  the  mines  came  fully  under  public 
ownership.  The  owners  and  manufacturers,  who  opposed 
public  ownership,  were  in  favor  of  joint  representation  to 
encourage  co-operation  and  to  enable  each  party  to  bring 
forward  for  discussion  any  question  of  mutual  interest. 
Sir  Arthur  Duckham  suggested  a  District  Coal  Board 
which  was  to  unify  the  working  of  the  mines  under 
private  ownership.  On  each  of  these  boards  there  were 
suggested  seven  directors,  two  of  whom  should  be  elected 
by  ballot  of  the  workers  ii^  the  area. 

The  scheme  of  representation  drawn  up  by  Mr.  Justice 
Sankey  consists  of  a  local  mining  council  in  each  mine, 
a  district  mining  council  in  each  of  fourteen  suggested 
districts,  and  a  national  mining  council.  The  object  of 
the  local  mining  council  is 

to  take  advantage  of  the  knowledge  of  the  workers  by  allowing 
them  to  sit  on  the  councils  for  the  purpose  of  advising  the 
manager  and  to  give  them  an  effective  voice  in  all  questions 
where  their  own  safety  and  health  are  concerned. 

The  district  mining  councils  are  intended 

to  prevent  the  bureaucratic  running  of  the  industry  by  causing 
it  to  be  controlled  locally  by  a  council  of  fourteen,  upon  which 
there  is  equal  representation  for  the  miners,  for  the  consumers, 
and  for  the  persons  acquainted  with  the  commercial  and  tech- 
nical side  of  the  industry. 

The  National  Mining  Council  is  defined  in  like  fashion 
by  Mr.  Justice  Sankey  as 

a  body  composed  of  members  of  the  district  mining  councils 
who  shall  meet  at  stated  intervals  to  discuss  and  advise  the 
Minister  of  Mines  on  all  questions  connected  with  the  in- 
dustry. The  Minister  of  Mines  will  be  assisted  by  a  standing 
committee  of  eighteen  members  elected  from  and  by  the 
National  Mining  Council,  who  will  meet  regularly  for  the 
purpose  of  superintending  the  operations  of  district  mining 
councils. 

On  the  local  mining  council,  which  is  to  consist  of  ten 
members,  three  of  whom  are  to  be  cx-ofhcio,  being 
managers,  llic  workeis  arc  to  have  four  members  elected 

368 


by  ballot  of  the  mine.  On  each  district  mining  council, 
with  its  twelve  members,  the  miners  are  to  have  four  mem- 
bers similarly  elected.  The  National  Mining  Council  is  to 
be  elected  from  the  district  mining  councils  by  proportional 
representation.  No  specified  proportion  is  reserved  for 
the  miners,  but  on  the  standing  committee  of  eighteen 
members  elected  from  the  National  Mining  Council  six 
are  to  represent  the  workers. 

It  should  be  said  that  the  six  labor  members  of  the 
Commission  suggested  that  fuller  representation  of  the 
miners  was  necessary  to  secure  their  cordial  co-operation 
in  the  success  of  the  industry.  The  scheme  they  preferred 
to  that  of  the  chairman  gave  half  the  seats  to  the  miners. 

The  coal  owners  recommended  also  a  scheme  of  pit 
committees,  district  councils,  and  a  national  council. 
These  various  committees  differ  little  in  form  from  those 
in  existence  in  the  industry  at  present  except  that  equal 
representation  of  management  and  miners  is  specified. 
The  district  councils  might  be  co-ordinated,  it  is  sug- 
gested, with  the  existing  conciliation  boards,  and  the  whole 
plan  might  be  co-ordinated  to  that  proposed  in  the  Whitley 
Report. 

In  his  scheme  for  the  administration  of  the  industry 
under  national  ownership,  Mr.  Justice  Sankey  makes 
provision  for  the  representation  of  other  interests  than 
those  of  the  owners  and  the  miners.  On  the  district 
mining  councils  four  persons  are  to  represent  the  con- 
sumers and  two  each  those  interested  in  the  technical 
and  commercial  side  of  the  industry.  In  iron  and  steel 
districts  two  at  least  of  the  consumers'  representatives 
are  to  represent  the  dominant  trades,  and  in  shipping 
districts  two  at  least  shall  be  recognized  coal  exporters. 
On  the  standing  committee  of  the  National  Mining  Coun- 
cil, which  is  to  superintend  the  operations  of  the  district 
mining  councils,  in  addition  to  six  representatives  of  the 
workers,  there  are  to  be  six  representing  consumers  and 
six  the  technical  and  commercial  side  of  the  industry. 

The  significance  of  the  second  report  of  the  Commis- 
sion was  overshadowed  somewhat  by  the  evidence  on 
reduced  output  tendered  at  the  close  of  the  inquiry. 
Official  figures  supplied  by  the  Coal  Controller  showed 
that  the  first  twenty  weeks  of  1919,  ending  May  24,  1919, 
were  much  less  productive  than  a  similar  period  in  1913, 
the  basic  year  adopted  for  comparison  in  most  official 

369 


tables  supplied.  The  average  number  of  men  employed 
during  these  periods  was  almost  identical,  but  there  had 
been  a  reduction  in  total  output  and  in  average  output 
per  man  per  week.  The  cause  for  this  was  to  be  found 
in  a  reduction  in  the  average  number  of  days  per  week 
on  which  pits  raised  coal  and  in  an  increase  of  nearly 
20  per  cent  in  absenteeism.  On  the  basis  of  the  first 
twenty  weeks  of  the  year  1919  the  total  output  for  that 
year,  without  reduction  in  hours,  could  not  exceed  242,- 
000,000  tons  as  compared  with  287,000,000  tons  in  1913, 
a  decline  of  15.7  per  cent  in  efficiency  of  output.  But, 
allowing  for  the  reduction  of  hours  after  July  16th,  conse- 
quent on  the  acceptance  of  the  provisions  of  the  first 
Sankey  Report,  the  estimated  output  for  the  year  1919 
was  228,000,000  tons,  a  decline  of  over  25  per  cent  on  the 
1913  figure.  The  estimated  output  for  twelve  months 
from  July,  1919,  under  the  reduced  hours  and  on  the 
basis  of  the  first  twenty  weeks  of  the  year  was  put  at 
217,000,000  tons. 

This  reduction  in  output  meant  that  both  domestic  and 
foreign  consumption  must  be  restricted.  Domestic  con- 
sumption in  1918  was  6%  per  cent  below  that  of  1913, 
and  it  would  be  necessary  to  continue  both  this  degree 
and  form  of  control.  Foreign  export  of  coal  would  be 
even  more  seriously  affected.  In  1913  the  export  had 
totaled  77,000,000  tons;  in  1918,  34,000,000.  For  the 
twelve  months  from  July,  1919,  it  would  need  to  be  re- 
stricted to  23,000,000  tons  per  annum. 

The  decrease  in  production  was  held  to  involve  a 
deficiency  on  the  working  of  the  industry  of  £46,000,000, 
equivalent  to  4  shillings  3  pence  per  ton  of  output.  In 
consequence  of  this  official  calculation,  the  Government 
announced  that  the  price  of  coal  to  the  domestic  consumer 
would  be  increased  6  shillings  ($1.50)  per  ton  from  July, 
1919. 


§  4.     Summary 

At  this  point,  the  study  of  the  coal  situation  in  England 
must  be  brought  to  a  close  and  its  results  summarized. 

(1)  'J'hc  output  of  coal  has  been  steadily  decreasing 
since  191.'i,  and  is  likely  to  be  lower  still  under  the  reduced 
hours  which  arc  operative  since  July,  i!)19. 

370 


(2)  This  has  necessitated  a  considerable  reduction  in 
the  quantity  of  coal  available  for  export,  and  in  a  significant 
reduction  in  that  available  for  domestic  consumption. 

(3)  France  and  Italy,  both  large  consumers  of  British  coal, 
find  Britain  unable  to  supply  their  wants. 

(4)  The  situation  leaves  the  markets  of  South  America  and 
of  certain  sections  of  Europe  open  to  the  coal  exporters  of  the 
United  States. 

(5)  With  the  decrease  in  output  has  gone  an  increase  in 
price.  This  adds  a  burden  to  the  domestic  consumer,  and 
an  equal  burden  on  British  manufacturers.  Cost  of  produc- 
tion has  been  largely  increased. 

(6)  Increasing  cost,  together  with  decreasing  quantities, 
of  coal  for  export,  has  gravely  affected  British  foreign  trade. 
This  effect  in  its  turn  tends  to  react  upon  the  cost  of  living  for 
the  masses  and  the  cost  of  production  for  the  manufacturer. 

(7)  Public  opinion  has  come  to  accept  the  principle  of 
public  ownership  of  the  coal  as  distinct  from  that  of  the  coal 
mines.  Coal  is  recognized  as  the  nation's  greatest  asset.  The 
present  system  of  exploiting  that  asset  is  recognized  as 
wasteful. 

(8)  Against  nationalization  of  the  industry,  that  is,  pub- 
lic control  of  the  mines  and  of  the  process  of  extracting  and 
selling  the  coal  obtained,  there  is  considerable  opposition. 
This  is  based  on  the  following  grounds: 

(a)  Government  control  would  be  more  costly  and  in- 
efficient. Though  profits  were  large  during  the  war,  the 
normal  margin  is  very  small. 

(b)  The  present  system  of  control  and  management  is 
not  without  its  faults,  but  it  has  a  record  of  business- 
like development  behind  it.  Its  faults  can  be  cured 
by  economies  and  by  larger  use  of  machinery.  These 
remedies  cannot  be  looked  for  under  government 
control. 

(c)  The  alarming  reduction  in  output  is  not  to  be  cured  by 
government  ownership.  It  is  doubtful  if  their  installa- 
tion under  private  ownership  could  offset  the  reduc- 
tion in  output  manifest  during  recent  years,  or 
expected  consequent  upon  shorter  hours. 

{d)  Nationalization  seems  directed  less  to  secure  the 
national  welfare  than  to  give  the  miners  a  larger 
share  in  the  control  of  the  industry.  As  the  report 
of  the  coal  owners  (June  20,  1919)  shows,  it  is  possible 
to  secure  this  latter  end  without  using  the  method 
of  nationalization. 

371 


(9)  The  British  coal  trade  and  with  that  British  industry 
and  foreign  trade  need  Increased  productivity  on  the  part  of 
the  miners.  Without  an  increased  supply,  British  coal  cannot 
again  be  cheap.  Without  cheap  coal,  Britain  is  likely  to  lose 
her  supremacy  as  a  manufacturing  and  an  exporting  nation. 

Note:  The  British  Government,  through  its  Prime  Minister,  Air.  Lloyd- 
George,  rendered  its  decision  on  the  Sankey  recommendations  August  18,  1919. 
It  was  a  refusal  to  accept  the  proposed  nationalization,  but  it  provided  for  the 
purchase  of  the  royalty  rights  by  the  state.  This  counter-proposal  of  the 
Government  was  rejected  by  the  Trade  Union  Congress  of  Glasgow  on  Septem- 
ber 12th.  At  this  Congress  the  proposition  that  'The  Congress  declares 
against  the  principle  of  industrial  action  in  purely  military  matters"  was  laid 
on  the  table  by  a  vote  of  2,255,000  against  2,086,000. 


372 


CHAPTER  XXIII 
NATIONALIZATION  OF  "KEY  INDUSTRIES" 

§  1.     Shipping  and  Shipbuilding 

Next  after  mines  and  railways  the  most  important 
proposal  for  nationalization  in  Great  Britain  pertains 
to  shipping.  With  the  exception  of  the  demands  of  Sir 
Leo  Chlozza  Money,  the  proposal  did  not  extend  to  all 
shipping,  but  only  to  "the  great  lines  of  steamers"^  and 
in  some  quarters  the  project  was  confined  to  making 
the  ships  acquired  by  the  Government  during  the  war 
"the'  nucleus  of  a  national  fleet." 

At  the  time  of  the  investigation  of  your  Commission  this 
feature  of  proposed  extension  of  Government  control 
had  become  a  dead  issue.  Instead  of  advancing  toward 
increased  Government  influence,  from  the  beginning  of 
the  new  year  the  Shipping  Controller  rapidly  relinquished 
the  control  of  shipping  and  freights  that  had  been  estab- 
lished during  the  war.  The  Government  also  withdrew 
from  the  business  of  shipbuilding  in  private  yards,  making 
over  the  contracts  for  unfinished  Government  ships  to 
private  interests.  And,  finally,  it  offered  for  sale  the 
Government-owned  shipbuilding  plants,  of  which  more 
in  particular  will  be  said  presently.  Besides  these  acts 
of  industrial  demobilization,  the  Government  definitely 
announced  to  the  country  that  it  would  not  propose  the 
nationalization  of  shipping. 

The  basis  for  this  decision  of  the  Government  is  to  be 
found  in  the  pre-armistice  "Reports  of  the  Departmental 
Committee  appointed  by  the  Board  of  Trade  to  Consider 
the  Position  of  the  Shipping  and  Shipbuilding  Industries 
After  the  War."  In  these  reports,  especially  in  the 
Final  Report,  there  was  an  exhaustive  marshaling  of 
evidence  and  clear-cut  recommendations  that  must  have 
impressed  the  whole  country.  The  committee  found  that 
the  position  of  British  shipping  after  the  war  would  be 
serious  Indeed.       "The  prospect,"  they  said,  "after  our 

^  Cf.  the  "Program  for  Reconstruction"  of  the  Labour  Party. 

373 


unparalleled  exertions,  is  deplorable."^  Again  they 
said,  the  grave  situation  which  has  now  resulted  may 
have  the  effect  that  British  shipping  "may  fall  behind  in 
the  competitive  race  and  definitely  lose  the  ascendency 
w4iich  has  been  the  keystone  of  the  Empire  and  a  condi- 
tion of  our  industrial  existence."^ 

Throughout  this  report  the  committee  takes  the  posi- 
tion that  the  interests  of  British  shipping  are  virtually 
identical  with  the  interests  of  traders  and  industrialists 
throughout  the  nation.  Everything  must  be  done  to 
restore  the  confidence  of  shipowners,  in  the  interest  of 
the  general  public.  To  the  same  ultimate  end  shipping 
should  be  allowed  to  make  good  profits  during  the  limited 
period  of  trade  activity  that  would  follow  the  conclusion 
of  peace.  It  also  "should  be  freed  at  the  earliest  possible 
moment  from  the  burden  of  war  taxation."  At  the  end 
of  the  war 

"our  industrial  position  will  be  potentially  very  strong, 
whereas  we  shall  be  left  with  a  mercantile  marine  quite  in- 
adequate to  meet  our  needs  or  to  recover  its  former  share  of 
the  world's  carrying  trade.  It  will  be  necessary  to  make 
the  restoration  of  the  mercantile  marine  the  first  charge  on 
the  national  resources  unless  our  industry  and  our  export 
trade  are  to  be  seriously  crippled,  and  we  are  to  suffer  the 
consequences  that  would  attend  our  decline  to  the  level  of  a 
second-rate  maritime  power."  ^ 

The  report  has  very  little  to  say  specifically  on  Govern- 
ment ownership  of  shipping.  In  the  one  place  where  it 
does  touch  on  the  subject  it  brings  out  an  objection  not 
often  considered  by  the  general  public  —  and  that  is  the 
difficulty  that  would  rise  from  contact  of  the  Government 
in  a  business  relationship  with  other  Governments. 

"It  is  inconceivable,"  the  committee  says,  "that  if  state 
ownership  be  substituted  for  private  enterprise,  the  state 
should  continue  the  carrying  trade  between  one  foreign 
country  and  another.  It  would  inevitably  have  to  confine 
its  activities  to  regular  services  between  different  parts  of 
the  Empire  and  between  the  Empire  and  foreign  countries; 
and  the  world's  carrying  trade  in  a  wider  sense,  especially  as 
typified  by  the  world-wide  operations  of  the  tramp  steamer, 
which  has  formed  an  integral  part,  if  not  the  backbone,  of 
British  marine  enterprise,  would  be  lost  to  this  country."  ' 

'  "  Dcpartnicntal  Committee  on  Shipping  and  Shipbuilding  "  (Cd.  9092),  p.  63. 
2  Ibid.,  p.  G2. 
*Ihid.,  p.  ()2. 
« Ibid.,  p.  63. 

374 


With  respect  to  Government  activities  connected  with 
shipping,  by  far  the  greater  part  of  the  report  deals  with 
the  subject  of  "Control," — the  elaborate  system  of 
Government  regulation  of  maritime  business  built  up  dur- 
ing the  war.  The  report  makes  the  most  decided  state- 
ments on  this  subject.     Thus  we  read: 

"We  believe  that  the  continuance  of  Government  operation 
and  control  is  bound  to  extinguish  private  enterprise  and 
lead  to  state  ownership." 

Again: 

"the  first  and  fundamental  condition  of  reconstruction  is  the 
early  removal  from  shipping  of  Government  operation  and 
control.  Such  control  .  .  .  always  tends  to  paralyze  indi- 
vidual effort.  Especially  is  this  so  in  an  industry  like  ship- 
ping, which  is  everywhere  exposed  to  international 
competition  and  depends  for  success  on  elasticity  and  freedom 
from   restrictions." 

Still,  again: 

"the  one  fundamental  condition  of  our  maritime  recovery  is 
the  early  release  of  shipping  from  Government  control,  the 
maintenance  of  private  enterprise  in  shipping  and  ship- 
building, and  the  consequent  repudiation  of  any  scheme  of 
state  ownership  in  either  industry  after  the  war."  ^ 

The  committee's  denunciation  of  war-time  control  of 
shipping  (that  is,  its  continuation  after  the  war,  strenu- 
ously advocated  by  the  radicals)  was  well  seconded  in 
other  quarters.  Said  Lord  Inchcape,  Chairman  of  the 
Peninsular  and  Oriental  Company,  at  the  annual  meeting 
of  the  company  in  December,  1918, 

"the  whole  community  is  sick  to  death  of  control  and  permits 
and  licenses  and  priority  certificates  of  all  classes." 

A  few  days  afterward  Lord  Inchcape  gave  specific 
examples  in  a  letter  to  The  Times  of  what  he  meant  by  the 
above  expression.  He  cited  recent  cases  of  his  being 
unable  to  get  permits  or  licenses  to  ship  propeller  shafts 
and  frames  out  of  the  country  for  the  repair  of  his  ships. 

In  this  matter  shipping  merely  suffered  along  with 
other  industries  in  general. 

"Trading  associations,"  said  Sir  Eric  Geddes,  "are  referred 
from  pillar  to  post,  from  department  to  department,  from 
committee    to    committee.     The    priority,    the    licenses,    the 

^"Departmental  Committee  on  Shipping  and  Shipbuilding"  (Cd.  9092), 
pp.  63  and  70. 

375 


control,  and  the  permit,  which  have  been  the  lodestars  of 
our  industrial  life  during  the  last  four  and  a  half  years,  have 
got  to  go."  ' 

Mention  has  already  been  made  that  the  Govern- 
ment withdrew  from  its  war-time  merchant  shipbuilding 
enterprises  early  in  1919.  This  consisted,  on  the  one  hand, 
in  the  sale  of  137  standard  steamers  under  construction, 
to  Lord  Inchcape  and  Sir  Owen  Philips,  to  be  completed 
and  resold  by  them  without  profit;  on  the  other  hand,  it 
consisted  in  the  offering  for  sale  of  the  Government's 
own  merchant  yards  at  Chepstow  and  Beachley.  These 
plants  were  first  offered  by  the  Government  to  certain 
trade  unions  and  to  the  co-operative  societies,  but  the 
offer  was  refused;  there  was  no  desire  by  labor  to  acquire 
a  "white  elephant."  And,  indeed,  the  taxpayers  had 
suffered  heavily  through  these  ill-starred  enterprises. 
Approximately  twenty  million  dollars  was  spent  and  not 
a  single  ship  built  and  launched.  The  general  style  of 
the  conduct  of  the  business  was  to  proceed  "as  if  getting 
ready  for  the  next  war."  There  were  constant  changes 
in  plans;  there  was  mismanagement  and  lack  of  order 
of  the  grossest  sort.'^ 

The  shipbuilding  plant  at  Chepstow  had  been  begun 
in  1916  by  the  Standard  Shipbuilding  Company  at  a  time 
when  merchant  shipbuilding  in  the  United  Kingdom  was 
at  a  very  low  ebb  because  of  concentration  of  labor  and 
resources  on  naval  work  for  the  Admiralty.  Certain 
leading  shipping  men  foresaw  the  crisis  that  was  to  come 
and  launched  their  enterprise  under  the  most  favorable 
auspices.  In  August,  1917,  the  Government  dispossessed 
the  Standard  Shipbuilding  Company,  because  it  had 
novel  plans  of  building  so-called  "fabricated"  ships  by 
means  of  military  labor  and  German  war  prisoners.  This 
plan  did  not  work  because  of  the  strenuous  objection  of 
the  trade  unions  (which  might  have  been  foreseen)  to 
conscripted  men  at  army  pay  being  used  in  such  civilian 
occupations. 

Most  of  the  criticism  of  the  "fiasco  at  Chepstow"  has 
been  directed  to  the  details  of  mismanagement  on  the 
spot,  which  made  the  place  one  of  several  which  became 
"household  words  for  official  waste  and  incompetence." 
But  of  far  greater  significance  than  the  money  wasted  at 

^  The  Times  Trade  Supplement  for  February,  1919,  p.  268. 
*  Cf.  the  amazing  disclosures  in  a  series  of  articles  in  The  Times  during  March. 

376 


Chepstow  (with  no  ships  to  show  for  it)  was  the  indirect 
influence  of  the  work  done  there  in  preventing  the  pro- 
duction of  ships  in  private  yards  elsewhere.  The  "pri- 
ority" for  materials  to  go  to  Chepstow  (and  be  dumped 
down  there  in  utmost  confusion)  seriously  crippled  private 
shipyards,  but  most  of  all  the  yards  were  disturbed  and 
hampered  by  the  disastrous  effect  upon  labor  of  the  novel 
plans  of  the  Government,  The  attempt  to  get  civilian 
work  done  by  men  under  military  discipline  aroused  and 
angered  labor  so  thoroughly  that  it  was  a  long  time  before 
their  suspicion  and  resentment  was  allayed;  and  this  at  a 
time  when  it  was  of  the  utmost  importance  to  have  co- 
operation and  good  feeling  between  the  shipbuilders  and 
the  unions  throughout  the  nation. 

The  conclusion  of  the  war  has  left  Great  Britain  short 
of  shipping,  as  all  the  world  knows,  and  the  greatest 
demand  will  be  put  upon  her  private  shipbuilders.  The 
Departmental  Committee,  cited  above,  maintains  that 
it  will  be  necessary  "immediately  on  the  conclusion  of 
peace  to  complete  annually  not  less  than  two  million  tons 
net  of  merchant  shipping,"  which  is  about  double  the  an- 
nual output  before  the  war.  Notwithstanding  this 
pressure  upon  the  British  shipbuilding  facilities,  the 
committee  recommends  that  there  be  no  restrictions  on 
"the  building  in  British  yards  of  ships  on  foreign  account." 
Such  restrictions  would  be  of  no  effect  in  case  there  is  a 
sufficient  demand  from  shipowners.  But,  on  the  other 
hand,  in  case  there  is  a  temporary  dearth  of  British  orders, 
such  restrictions 

would  prejudice  still  further  our  shipbuilding  industry  and 
ensure  its  transference  to  other  countries.  At  a  later  date 
the  restoration  of  British  shipping  would  be  impeded  by  the 
absence  of  a  sufficient  shipbuilding  industry  in  this  country.  ^ 

It  was  said  above  that  nationalization  of  shipping  in 
Great  Britain  had  become  early  in  the  present  year  a  dead 
issue.  Such  was,  indeed,  the  case  so  far  as  any  direct 
urging  by  the  Government  was  concerned.  But  it  is  of 
considerable  significance  that  an  attempt  was  made  by 
indirection  to  drive  in  the  thin  edge  of  a  wedge  in  this 
matter.  In  the  bill  creating  a  Ministry  of  Ways  and 
Communications  (the  "Transport  Bill")  introduced  in 
Parliament  in  February,  1919,  it  was  provided  that  the 
Ministry  under  an  Order  in  Council  might  be  authorized 

^  "Departmental  Committee  on  Shipping  and  Shipbuilding"  (Cd.  9092),  p.  67. 

377 


"to  establish,  maintain,  and  work  transport  services  by 
land  and  water."  This  was  in  addition  to  the  authority 
to  acquire  water  services  (the  Channel  boats  chiefly) 
carried  on  as  ancillary  to  the  railways.  Under  a  storm 
of  protest  this  particular  project,  which  meant  the  pos- 
sibility of  Government  lines  of  steamships  competing 
with  privately  owned  lines,  was  dropped. 

§2.     Nationalization    of    "Key    Industries" 

During  the  war  the  expression  "key"  or  "pivotal" 
Industries  came  into  extensive  use  in  England.  Such 
Industries  are  of  small  magnitude  In  contrast  to  the  great 
staple  trades  (such  as  coal  mining,  iron  and  steel  Industry, 
shipbuilding,  and  the  various  textile  industries),  but  they 
are  nevertheless  important  because  upon  them  are  de- 
pendent whole  series  of  processes  in  the  general  industrial 
system.  The  commodities  supplied  by  such  small  but 
strategic  industries  "are  essential  to  national  safety  as 
being  absolutely  indispensable"  to  the  more  important 
industries:    hence,  the  figure  of  speech  of  a  "key." 

The  Parliamentary  Committee  on  Industrial  and 
Commercial  Policy,  in  its  Interim  Report  on  Certain 
Essential  Industries  (Cd.  9033),  discusses  the  situation 
at  some  length  with  respect  to  synthetic  dyes,  spelter, 
tungsten,  magnetos,  optical  and  chemical  glass,  hosiery, 
needles,  thorium  nitrate,  barytes,  limit  and  screw 
gauges,  and  certain  drugs.  The  uses  of  each  of  these 
articles  of  commerce  is  set  forth,  together  with  the  reasons 
why,  before  the  war,  they  were  supplied  "entirely  or 
mainly"  from  enemy  sources  or  sources  under  enemy 
control.  Magnetos,  for  example,  are  a  "key"  to  all 
forms  of  application  to  the  arts  of  internal  combustion 
engines,  and  before  the  war  were  supplied  to  Great 
Britain  almost  exclusively  by  the  Bosch  Company  of 
Stuttgart.  The  committee  says  that  it  is  informed  that 
"but  for  the  large  stock  held  in  this  country  by  that 
company,  the  military  position  at  the  outbreak  of  war 
would  have  been  very  serious."  In  like  manner  the  war 
brought  the  discovery  of  how  dependent  cartridge- 
making  is  upon  a  sufficient  supply  of  spelter  (zinc),  and 
also  the  fact  that  the  chief  source  of  supply  of  ore  for 
spelter  within  the  British  Empire,  the  Broken  Hill  mine, 
of  West  Australia,  had  come  under  the  control  of  German 
interests.     With  almost  all  the  "key"  or  "pivotal"  in- 

378 


dustrles,  there  is  the  pivotal  natural  resource  and  the 
pivotal  manufacture.  Thus,  tungsten  is  used  as  an  alloy 
in  making  high-speed  steel,  upon  which,  therefore, 
the  whole  machine-tool  making  and  machine-tool  using 
industry  depends.  The  source  of  this  metal  is  chiefly  an 
ore  called  wolfram,  and  two  of  the  four  leading  and 
approximately  equal  sources  of  supply  are  within  the 
British  Empire.  But  the  smelting  of  the  ore,  which  is 
not  mined  at  all  in  Germany,  was  before  the  war  almost 
wholly  confined  to  Germany,  "where  the  manufacture 
was  carried  on  in  association  with  large  chemical  under- 
takings." The  Germans  were  able  and  willing  to  treat 
the  low  grade  ores,  such  as  British  and  American  firms 
would  not  buy,  and  so  came  into  "control  also  of  most 
of  the  supplies  of  the  best  ore."  The  result  here,  as  with 
the  other  so-called  "keys,"  was  great  embarrassment  to 
the  major  British  industries  when  war  clogged  the  ordinary 
channels  of  commerce.  It  became  obvious  to  the  British 
public  that  such  conditions  with  respect  to  these  small, 
and  therefore  formerly  overlooked,  trades  must  not  be 
suffered  to  continue;  the  "future  safety  of  the  nation" 
was  involved. 

The  remedy  for  the  situation  was  as  various  in  form 
as  the  special  circumstances  of  each  key  industry  itself. 
The  most  general  recommendation  of  the  committee 
was  the  establishment  of  a  permanent  Special  Industries 
Board  to  watch  over  the  development  of  the  key  indus- 
tries, and  to  take  such  detailed  measures  as  were  necessary 
from  time  to  time  for  their  promotion  and  assistance. 
Again,  there  were  suggestions  of  prohibition  of  export 
from  the  British  Empire  of  the  raw  materials  concerned, 
or  the  control  of  such  export  by  licenses  and  heavy  duties. 
Still  again,  there  was  the  proposal  (actually  carried  into 
effect  during  the  war)  of  encouragement  of  manufacture 
in  these  directions  within  the  United  Kingdom  by  means 
of  prohibitions  of  import,  heavy  import  duties,  and  by 
the  payment  of  subsidies.^  The  whole  trend  of  policy 
with  respect  to  the  key  industries  has  little  direct  connec- 
tion with  "  nationalization,"  as  that  term  has  been  defined : 
its  chief  significance  is  its  bearing  upon  the  future  fiscal 
system  of  Great  Britain.  It  may  well  come  about  that 
the  handling  of  the   key  industries,   as  outlined   above, 

1  See  passim,  the  "Final  Report  of  the  Committee  on  Commercial  and  In- 
dustrial Policy  After  the  War"  (Cd.  9035);  also  passim,  the  "Final  Report  of 
the  Dominions  Royal  Commission"  (Cd.  8462). 

379 


may  be  a  prominent  factor  In  bringing  in  a  general  policy 
of  protection. 

But,  although  the  subsidizing  and  public  control  of 
key  industries  have  thus  come  about  (as  wartime  "con- 
trol" in  general)  for  general  public  reasons,  and  not  as  a 
part  of  the  particularist  nationalization  movement, 
there  have  been,  nevertheless,  some  indications  of  the 
possibility  of  its  being  drawn  into  that  movement.  Thus, 
a  writer  in  a  current  number  of  the  Contemporary  Review^ 
suggests  that  it  would  be  better  than  subventions  for  the 
Government  "to  take  over  these  industries,"  assuming 
full  business  responsibility  for  them,  and  "using  any 
profits  to  lighten  the  burden  that  rests  upon  the  tax- 
payers." This  last  is  the  leading  popular  argument  for 
nationalization  in  every  direction  at  this  time  of  moun- 
tainous debt  and  crushing  taxation.  Industries  are  to 
be  "taken  over"  by  the  Government  and  the  profits 
which  will  then  somehow  miraculously  emerge  are  to  be 
used  in  relief  of  taxes. 

Before  leaving  this  general  topic  mention  should  be 
made  of  still  another  key  or  pivotal  industry  not  com- 
monly listed  as  such,  and  that  is  the  large  scale  manu- 
facture of  electricity  for  power.  Even  before  the  war 
it  was  prominently  agitated  in  Great  Britain  that  the 
power  for  manufacturing  of  the  future  should  be  electricity 
produced  at  huge  central  stations  near  the  coal  mines 
and  distributed  throughout  the  manufacturing  areas. 
During  and  since  the  war  this  project  has  attracted  more 
and  more  attention.  The  great  possibilities  of  saving  of 
coal  by  this  means  are  obvious.  Also  the  concentration 
of  dependence  of  manufacturing  in  general  upon  these 
central  sources  of  power  is  obvious.  Clearly  such  great 
centralized  power-producing  and  distributing  systems 
would  be  "keys"  indeed.  Hence  it  is  not  surprising  that 
the  advocates  of  nationalization  are  keen  upon  their 
capture.  A  prominent  plank  of  the  Labour  Party  program 
for  reconstruction  is  the  demand  that  "so  powerful  an 
enterprise"  as  these  "gigantic  'super-power  stations' 
which  could  generate  at  incredibly  cheap  rates  enough 
electricity  for  the  use  of  every  industrial  establishment 
and  every  private  household  in  Great  Britain,  .  .  .  must 
not  be  allowed  to  pass  into  the  hands  of  private  capital- 
ists." And  this  demand  is  in  the  way  of  being  realized, 
because  one  of  the  clauses  of  the  bill  creating  the  Ministry 

» August,  1919. 

:}80 


of  Ways  and  Communications  (the  Transport  Bill, 
already  alluded  to)  gives  this  new  department  of  the 
Government  control  over  "the  supply  of  electricity." 
The  reason  given  for  the  inclusion  of  this  feature  in  a 
"transport"  measure  is  that  the  lines  of  railway  afford 
the  safest  and  cheapest  avenues  for  the  distribution  of 
electricity  from  the  generating  stations.  Furthermore, 
the  proposed  electrification  of  the  railways  is  linked  up 
with  the  project  of  "  super-power  stations." 

§  3.     Significance  of  Key  Industries  and  Key  Men 

This  concept  of  key  industries  has  spread  to  other 
economic  activities.  In  demobilization  the  British  plan 
was  to  release  pivotal  men  in  order  that  industry  might 
be  set  going  most  quickly.  These  pivotal  men  either  had 
the  skill  necessary  for  management  of  key  activities, 
or  ran  machines  that  were  pivotal  to  a  whole  series  of 
other  machines.  The  fact  is  that  there  is  no  end  to  the 
pivotal  positions  in  our  interlocking  industry.  A  certain 
material  may  be  pivotal,  or  a  certain  industry,  or  a 
certain  group  of  men,  or  a  certain  individual,  or  a  certain 
machine.  But  one  should  not  stop  here,  because  the 
various  parts  of  a  machine  may  be  looked  upon  as  pivotal 
or  the  fingers  or  eyes  or  feet  of  the  workmen.  The  princi- 
ples aimed  at  in  all  this  talk  of  pivotal  men  and  pivotal 
industry  are  simple.  Ours  is  a  co-operative  industry; 
all  men,  all  machines,  all  industries  work  together.  Some 
operations  are  primary,  some  secondary,  but  from  a 
certain  point  of  view  any  one,  practically,  may  become 
pivotal. 


381 


CHAPTER   XXIV 
PROPERTY    RIGHTS 

§  1.     Introduction 

Although  the  subject  of  property  rights  may  seem  at 
first  glance  to  have  little  connection  with  the  investigation 
of  industrial  conditions  in  Great  Britain,  no  one  can 
analyze  the  theories  of  social  reformers  in  that  country 
or  estimate  the  motives  that  furnish  the  stimulus  to  their 
activities  without  becoming  conscious  of  an  altered  atti- 
tude towards  property  and  towards  the  rights  involved 
in  the  ownership  thereof.  Fundamentally,  most  of  the 
changes  which  are  occurring  in  industry  and  politics  in 
Great  Britain  are  alterations  in  the  conception  of  property 
and  in  the  sphere  and  function  of  property  owners. 
From  about  the  year  1906,  when  the  Liberal  Ministry 
of  Campbell-Bannerman  came  into  power,  till  the  present 
day,  there  has  been  a  steady  and  cumulative  movement 
that  has  tended  to  lay  stress  on  state  ownership  and 
control  of  property.  During  the  war  this  movement, 
which  had  previously  been  political  in  essence,  was 
reinforced  by  certain  industrial  theories,  the  strength  and 
significance  of  which  were  becoming  manifest  at  the  time 
of  the  visit  of  the  Commission. 

To  make  the  subject  clear  and  to  enable  one  to  under- 
stand the  significance  of  the  social  currents  just  suggested 
there  is  need  for  a  definition  and  analysis  of  the  concepts 
of  property  and  property  rights.  By  property  is  usually 
meant  some  definite  object  exclusively  controlled  or 
possessed.  This  Is  the  more  common  designation  of  the 
term.  Thus,  a  man  speaks  of  an  automobile,  a  house,  a 
piece  of  land,  or  a  number  of  shares  In  a  corporation  as  his 
property,  or  one  may  speak  of  a  park  as  being  public 
property.  Behind  this  reference  to  the  object  possessed 
there  Is  the  right  to  control  or  possession.  In  some 
cases  this  is  taken  to  be  implied  In  the  designation  "prop- 
erty"; In  other  cases  the  more  correct  term  "property 
rights"  Is  used. 

Property  rights  depend  for  their  meaning  and  their 
assertion  on  the  consent  of  organized  society.     Nothing 

382 


is  held  by  right  except  in  so  far  as  its  holding  has  secured 
recognition  from  others  and  will  be  maintained  by  them. 
This  is  the  essence  of  what  is  implied  in  a  right.  In  this 
connection  there  arises  the  most  fundamental  distinction 
between  property  rights,  namely,  that  between  private 
and  public  property.  Private  property  exists  where 
society  has  recognized  the  exclusive  right  of  an  individual 
to  the  control  and  possession  of  some  object  or  objects. 
But  society  may  vest  control  or  possession  in  itself  and 
thus  set  up  what  is  known  as  public  property. 

The  historical  nature  of  the  institution  of  property  is 
well  known  to  the  student  of  social  institutions.  The 
form  and  significance  of  property  have  altered  in  accord 
with  varying  social  and  economic  opinions  of  society. 
Property  owned  by  the  state  has  become  private  property, 
as  in  the  days  of  the  settlement  of  the  western  part  of  the 
United  States.  At  other  times  private  property  has  be- 
come state  property. 

Various  principles  have  determined  the  form,  whether 
private  or  public,  which  property  has  assumed.  Promi- 
nent among -these  principles  today  is  that  of  the  public 
interest.  This  principle  leads,  in  the  first  place,  to  the 
limitation  of  property  rights,  as  in  the  matter  of  eminent 
domain  and  inheritance  duties.  But  it  is  involved  more 
powerfully  in  justification  of  the  transfer  of  private 
property  into  the  hands  of  the  state.  While  each  specific 
transfer  needs  separate  consideration,  it  is  generally 
agreed  that  no  lesser  principle  than  that  of  public  interest 
can  justify  such  an  alteration  in  the  form  of  property 
holding. 

To  understand  how  recent  industrial  changes  in  Great 
Britain  have  affected  property  rights,  notice  must  be 
taken  of  the  fact  that  property  implies  control  as  well  as 
possession.  So  far  as  applicable  to  objects,  this  control 
arises  from  possession.  As  such,  it  may  be  control  for 
use,  as  in  the  case  of  the  ownership  of  an  automobile,  or 
for  power,  as  in  that  of  the  ownership  of  capital.  This 
control  for  power  implies  control  over  the  services  and 
activities  of  other  men.  The  holders  of  property  have  in 
their  hands  the  instruments  whereby  wealth  is  to  be  pro- 
duced. In  return  for  granting  access  to  their  property, 
the  holders  claim  control,  not  merely  in  the  sense  of 
possession,  but  in  respect  of  the  conditions  under  which 
use    is    allowed    and    also   of   the    relations    among   men 

383 


engaged  in  the  use  of  their  property.  The  factors  in 
economic  production,  to  be  more  specific,  are  thus  instru- 
ments in  the  control  of  the  owners  of  property.  Any 
effort  to  alter  the  form  or  degree  of  this  element  of  control 
or  to  set  up  a  new  type  of  economic  organization  will 
tend  to  change  the  extent  and  form  of  property  rights. 
This  fact  constitutes  the  significance  of  many  of  the 
industrial  movements  sketched  in  earlier  stages  of  this 
report. 

Discussion  of  the  subject  will  follow  the  periods  of 
time  determined  by  the  war.  In  the  pre-war  period 
there  were  many  legislative  measures  dealing  with  the 
land  and  new  forms  of  taxation  intimately  related  to 
the  social  concept  of  property.  During  the  war  such 
measures  as  the  Excess  Profits  Tax  and  the  suggested 
levy  on  capital  indicate  the  strengthening  of  the  idea  of 
public  interest  over  the  absolute  rights  of  private  property 
so  strongly  entrenched  in  English  thought  and  English 
law.  Since  the  war  the  demand  for  nationalization 
and  the  aim  of  the  workers  to  secure  control  of  manage- 
ment and  of  the  conditions  of  the  employment  relation 
indicate  that  property  rights  of  that  sort  are  changing 
under  the  pressure  of  a  new  ideal  of  social  and  economic 
organization. 

§  2.     Social  Legislation  Affecting  Property  Rights 
Prior  to  the  War 

For  several  years  prior  to  the  war  the  financial  pro- 
posals of  the  Liberal  Administration  then  in  power  were 
directed  towards  carrying  out  measures  of  social  legisla- 
tion. Schemes  for  old  age  pensions,  labor  exchanges,  and 
health  insurance  were  launched,  each  calling  for  new 
and  added  expenditures.  It  was  the  contention  of  the 
Liberals  that  the  money  for  these  schemes  could  be  ob- 
tained by  a  form  of  taxation  which  would  divert  to  social 
uses  those  advantages  that  wealthy  people  had  obtained 
from  society  itself.  Particular  attention  was  devoted  to 
the  land  question,  in  which  matter  it  was  held  that  every 
increment  of  value  that  does  not  depend  on  improvements 
made  by  the  landowner  should  be  subject  to  a  special 
tax.  The  principle  behind  this  whole  budget  has  been 
described  by  a  leading  socif)logist  thus:  "to  divert  every 
form  of  economic  rent  to  public  cofi"ers."  '■ 

*  Hobhousc,  L.  'I'.:   "'i'hc  Labour  Movement,"  p.  118. 

384 


Of  the  two  chief  measures  in  the  Lloyd-George  Budget 
of  1909-10,  the  most  important  in  its  social  significance 
was  the  land  tax.  By  the  clauses  relating  to  this  matter 
in  the  Finance  Bill,  1909-10,  a  tax  of  20  per  cent  was 
placed  on  the  unearned  increment  upon  land  where 
this  unearned  increment  was  due  to  the  growth  and  work 
of  the  community  and  exceeded  more  than  10  per  cent 
of  the  site  value  at  a  specified  period.  At  the  same  time 
a  tax  of  one  halfpenny  in  the  pound  was  laid  upon  un- 
developed land  of  a  value  of  more  than  £50  an  acre  that 
was  being  held  back  from  use  especially  in  building. 
Further,  a  new  tax  of  5  per  cent  was  imposed  upon  mining 
rents  and  royalties. 

As  a  financial  expedient,  that  on  land  values  was  not 
a  success.  It  yielded  in  1910-11  only  a  little  over 
£500,000,  and  at  its  maximum  never  more  than  £750,000. 
During  the  war  its  yield  was  almost  negligible.  Its 
significance  lay  rather  in  its  revelation  of  an  altered 
temper  towards  the  land  question  and  to  the  vested  rights 
so  long  associated  therewith.  The  echoes  of  the  struggle 
over  this  matter  have  not  yet  died  out  in  England,  and 
the  attitude  of  the  miners'  representatives  at  the  Coal 
Commission  is  convincing  evidence  of  the  scrutiny  to 
which  advanced  thought  in  Great  Britain  is  subjecting 
ancient  rights  and  privileges. 

At  the  same  time  increased  duties  were  levied  on  estates 
bequeathed  at  death.  These  duties  had  been  in  existence 
for  some  time  but  were  only  moderate  in  their  rate.  The 
Lloyd-George  Budget  increased  the  scale,  particularly 
in  the  case  of  estates  of  a  higher  value.  These  taxes 
were  far  more  productive  than  those  on  land  values, 
and  levied  a  larger  toll  upon  property.  But  because 
they  were  not  new,  and  because  the  right  of  the  state  had 
come  to  be  recognized  in  this  particular,  they  did  not 
create  quite  the  same  feeling  of  disturbance  as  did  those 
which  were  aimed  to  create  a  "landed  revolution." 

§  3.     War  Measures  and  Claims 

During  the  war  various  forms  of  taxation  of  a  new  order 
were  enforced  tending  to  divert  to  state  uses  much  that 
had  hitherto  been  considered  the  exclusive  right  of  the 
property  owner.  Most  of  this  taxation  concerned  the 
limitation  of  profits  or  was  an  effort  to  ensure  that  war- 
time profits  should  return  in  large  measure  to  the  state. 

385 


But  in  addition  there  arose,  consequent  upon  the  large 
national  debt  incurred  in  the  war,  a  suggestion  for  the 
extinction  of  a  large  part  of  that  debt  by  a  levy  on  capital. 

The  first  of  the  measures  of  taxation  was  the  Munitions 
of  War  Act,  1915.  Sections  of  this  act  provided  that  any 
excess  of  net  profits  made  in  controlled  munition  establish- 
ments over  a  standard  amount  should  be  paid  into  the 
national  exchequer.  The  standard  amount  of  profits  was 
defined  as  the  average  of  the  net  profits  for  two  years 
preceding  the  war.  This  measure  was  designed  to  ex- 
propriate all  profits  in  munition  making,  due  exclusively 
to  the  war.  That  is,  it  confiscated  war  profits.  It  Is 
interesting  to  observe  that  this  levy  "was  shown  by 
experience  to  be  defective,"^  and  produced  much  less  than 
was  anticipated.  It  was  a  restriction  of  profits  that 
dried  up  the  source  of  the  motive  towards  making  large 
profits.     In  the  words'^  of  Mr.  A.  Bonar  Law,  the  levy 

had  this  great  disadvantage,  that  once  a  certain  amount  of 
profit  was  made,  nothing  more  could  be  made  in  conse- 
quence—  i.  e.,  all  incentive  beyond  a  certain  point  was  taken 
away. 

As  a  result  the  amount  collected  from  all  the  controlled 
firms   was  "practically  negligible." 

The  Excess  Profits  Tax,  the  second  measure  of  taxation, 
came  Into  force  in  November,  1915.  It  represented  a  tax 
not  on  war  profits  so  much  as  on  war-time  profits  calcu- 
lated on  the  basis  of  the  profits  arising  from  any  trade  or 
business  during  the  period  August  4,  1914,  to  July  1,  1915. 
Where  the  profits  In  that  period  exceeded  the  pre-war 
standard  of  profits  by  £200,  a  duty  was  to  be  imposed 
on  the  excess  above  that  amount.  The  pre-war  standard 
of  profits  was  defined  as  the  average  profit  arising  from 
any  two  of  the  three  last  pre-war  trade  years,  to  be 
selected  by  the  taxpayer.  The  rate  of  taxation  was  at 
first  fixed  at  50  per  cent.  In  April,  1916,  the  rate  was 
raised  to  GO  per  cent,  and  in  May,  1917,  to  80  per  cent. 
It  remained  at  this  figure  till  April,  1919,  when  It  was 
reduced  to  40  per  cent.  In  the  financial  year  1917- 
1918  this  tax  realized  £220,000,000,  or  nearly  one-third 
of  the  total  revenue  for  the  year. 

Notice  ought  also  to  be  taken  of  the  use  in  war  time 
of  the  Income  Tax  to  levy  large  toll  upon  the  Incomes  of 

»  "Industry  and  Finance,"  cd.  by  Prof.  A.  W.  Kirkaldy,  London,  1917,  p.  304' 
»  Quoted  ibid.,  p.  308. 


the  rich.  At  the  beginning  of  the  war  the  rate  of  income 
tax  previously  in  existence  was  increased  40  per  cent,  the 
exemption  limit  lowered,  and  the  relief  granted  for 
dependents  slightly  decreased.  At  the  same  time  the 
scale  of  the  supertax  was  extended.  In  further  budgets 
the  rates  were  increased  both  for  ordinary  incomes  and 
for  those  paying  supertax.  By  the  budget  of  1918  earned 
incomes  below  £2,000  were  taxed  on  a  scale  ranging  from 
3  shillings  to  5  shillings  and  3  pence  in  the  pound.  Above 
£2,000  a  supertax  began,  so  that  incomes  above  £10,000 
bore  a  supertax  of  4  shillings  6  pence,  that  is,  a  total  tax 
of  9  shillings  9  pence  in  the  pound,  or  48.75  per  cent. 

Another  measure  of  considerable  economic  significance 
was  that  of  the  "mobilization"  and,  later,  the  requisition- 
ing of  securities.  To  steady  American  exchange  in  the 
early  days  of  the  war  and  to  meet  the  large  indebtedness 
of  the  Allies  to  America  for  munitions,  the  Government 
needed  control  of  foreign  and  colonial  securities.  It 
offered  to  purchase  or  borrow  such  securities  at  the  current 
market  price.  In  August,  1916,  the  British  Treasury 
made  further  efforts  to  obtain  control  of  such  securities, 
imposing  in  its  Finance  Act,  1916,  a  penal  additional  in- 
come tax  of  2  shillings  in  the  pound  upon  income  derived 
from  such  securities.  Eventually,  in  January,  1917,  the 
Treasury  applied  the  Defence  of  the  Realm  regulations  to 
such  of  these  securities  as  it  deemed  expedient  to  secure, 
and  requisitioned  them  at  their  full  capital  value. 

At  the  close  of  1917  and  the  beginning  of  1918  there 
arose  a  proposal  for  a  levy  on  capital.  This  scheme 
was  fathered  by  the  Labour  Party,  with  Mr.  Sidney  Webb 
as  the  chief  advocate.  In  its  first  form,  as  advanced  by 
the  Labour  Party,  it  was  to  be  a  method  of  war  finance, 
but  later  it  was  advocated  only  as  a  means  for  the  re- 
demption of  the  war  debt.  In  their  scheme  of  reconstruc- 
tion,' adopted  in  January,  1918,  the  Labour  Party  put  their 
proposal  forward  in  the  following  terms: 

It  will  be  imperative  at  the  earliest  possible  moment  to  free 
the  nation  from,  at  any  rate,  the  greater  part  of  its  new  load  of 
interest-bearing  debt  for  loans  which  ought  to  have  been  levied 
as  taxation;  and  the  Labour  Party  stands  for  a  special  capital 
levy  to  pay  off,  if  not  the  whole,  a  very  substantial  part  of  the 
entire   National   Debt  —  a   capital   levy  chargeable   like  the 

*  Known   as   "Labour   and  the  New  Social  Order,"  quoted  in  Kellogg  and 
Gleason,  "British  Labour  and  the  War,"  p.  389. 

387 


Death  Duties  on  all  property,  but  (in  order  to  secure  equality 
of  sacrifice)  with  exemption  of  the  smallest  savings,  and  for  the 
rest  at  rates  very  steeply  graduated,  so  as  to  take  only  a  small 
contribution  from  the  little  people  and  a  very  much  larger 
percentage  from  the  millionaires. 

In  the  platform  of  the  party  In  the  elections  of  Decem- 
ber, 1918,^  a  more  concrete  form  was  given  to  the  demand, 
which  was  there  termed  the  "conscription  of  wealth." 

This  means  the  substitution  for  a  large  part  of  the  existing 
income  tax  of  a  carefully  graduated  capital  tax,  exempting 
possessions  under  £1,000  and  taxing  very  lightly  those  under 
£5,000. 

The  proposal,  however,  has  not  made  much  headway. 
It  is  open  to  many  objections  that  are  felt  to  have  great 
weight.  These  have  been  expressed  in  a  leading  article 
in  The  Economist."^ 

It  penalizes  those  who  save,  lets  off  those  who  squander, 
involves  great  delay,  and  gives  great  opportunity  for  dis- 
honesty in  the  matter  of  valuation,  and  by  depriving  vigorous 
business  men  of  a  slice  of  their  capital  it  checks  their  activity 
at  a  time  when  all  the  energy  of  the  nation  will  be  needed  to 
cover  and  heal  the  scars  of  war. 

In  general  the  British  public  is  inclined  to  carry  the 
financial  burden  through  taxation  rather  than  by  such 
a  violation  of  property  rights  as  is  involved  in  the  levy  on 
capital.  The  general  support  which  the  Labour  Party's 
proposal  at  first  received  has  receded,  and  public  opinion 
is  at  present  fairly  averse  to  such  action.  Nevertheless 
the  significance  of  the  proposal  is  not  diminished  by  its 
seeming  failure.  It  shows  how  advanced  is  the  concept 
of  property  as  being  regulated  in  its  form  and  control  by 
the  principle  of  public  interest. 


§  4.     Demands  for  Control 

With  the  prospect  of  peace  and  in  view  of  the  altered 
economic  conditions  of  England  consequent  upon  the 
war  came  a  demand  for  the  nationalization  of  certain 
industries.  It  was  held  by  those  who  supported  this 
demand  that  control  by  private  employers  meant 

•Quoted  in  Kellogg  and  Glcason,  p.  417. 
•  Tht  Economist,  January  5,  1919,  p.  3. 

88t 


not  .  .  .  the  service  of  the  community,  but  —  by  the  very 
law  of  their  being  —  only  .  .  .  the  utmost  possible  profiteer- 
ing.^ 

On  the  basis  of  this  attitude  towards  private  ownership, 
and  because  of  a  belief  that  Government  control  during 
the  war  had  reduced  profiteering,^  the  Labour  Party  began 
to  advocate  the  immediate  nationalization  of  the  railways, 
mines,  and  the  production  of  electric  power.  Explaining 
their  plans  in  more  detail,  and  with  particular  reference 
to  transportation,  they  declared^ 

unhesitatingly  for  the  national  ownership  and  administration 
of  the  railways  and  canals,  and  their  union,  along  with  harbors 
and  roads,  and  the  posts  and  telegraphs  —  not  to  say  also  the 
great  lines  of  steamers  which  could  at  once  be  owned,  if  not 
immediately  directly  managed  in  detail,  by  the  Government  — 
in  a  united  national  service  of  Communication  and  Transport; 
to  be  worked,  unhampered  by  capitalist,  private  or  purely 
local  interests  (and  with  a  steadily  increasing  participation  of 
the  organized  workers  in  the  management,  both  central  and 
local),  exclusively  for  the  common  good.  .  .  .  The  railways 
and  canals,  like  the  roads,  must  henceforth  belong  to  the 
public  and  to  the  public  alone. 

What  has  been  done  in  the  direction  of  meeting  this 
demand  has  been  fully  explained  in  a  preceding  chapter. 
Suffice  it  here  to  add  in  summary  that  proposals  have 
been  made  for  the  nationalization  of  mines,  railways, 
electric  power,  banking,  shipping,  industrial  and  life 
assurance. 

The  Labour  Party's  platform  also  called  for  a  continu- 
ance of  Government  control  and  price  fixing  such  as  was 
carried  on  during  the  war.  It  declared  itself^  in  favor  of 
retaining  and  developing 

the  present  system  of  organizing,  controlling,  and  auditing 
the  processes,  profits,  and  prices  of  capitalist  industry. 

It  held  that  the  publicity  of  this  procedure  was  effective 
in  bringing  inefficient  firms  up  to  a  higher  level  of  effi- 
ciency, while  "cost  accounting,"  together  with  the  author- 
itative limitation  of  prices,  formed  the  only  effective 
security  against  profiteering. 

1  "Labour  and  the  New  Social  Order,"  quoted  in  Kellogg  and  Gleason,  p.  382. 
» Ibid.,  p.  386. 
» Ibid.,  p.  383. 
*  Ibid.,  p.  410. 

389^ 


This  extension  of  Government  ownership  and  control 
was  seconded  by  a  demand  on  the  part  of  the  workers  for 
a  share  in  management.  The  program  of  the  Labour 
Party  in  connection  with  transportation  shows  that  they 
shared  this  aim.  But  its  chief  protagonists  are  the 
National  Guildsmen,  whose  views  have  shaped  greatly 
the  demands  of  the  miners,  and  whose  leading  thinker, 
Mr.  G.  D.  H.  Cole,  is  the  chief  of  those  "intellectuals" 
whose  abilities  are  at  the  service  of  the  workers  of  England. 

The  views  and  aims  of  the  National  Guildsmen  go 
beyond  the  principle  of  nationalization.  To  them  na- 
tionalization is  secondary  to  the  control  of  production  by 
the  worker  in  the  capacity  of  producer,  "National  man- 
agement is  not  inadequate,  but  wrong."  ^  They  regard 
nationalization  as  only  state  capitalism,  the  refuge  of 
the  capitalist  when  he  finds  that  the  aims  and  methods 
of  the  workers  are  threatening  his  profits. 

Nationalization  is  inevitable,  not  because  it  is  the  policy 
of  the  Labour  Party,  but  because  it  is  rapidly  becoming  sound 
capitalist  economics.^ 

Its  method  of  control  is  necessarily  bureaucratic,  and 
is  thus  entirely  opposed  to  the  democratic  control  of 
industry  that  the  Guildsmen  seek. 

Yet  the  opposition  of  Guildsmen  is  only  to  nationaliza- 
tion as  a  goal,  not  to  it  as  a  step  towards  their  goal.  They 
are  confident  that  nationalization  of  mines  and  railways, 
for  instance,  will  come  before  Guild  control  can  be 
achieved,  but  nationalization  in  their  opinion  Is  not  a 
necessary  prerequisite  in  any  industry  and  certainly 
not  In  other  than  public  utility  services.  It  docs  not 
matter  whether  the  control  of  industry  is  to  be  wrested 
from  the  state  or  from  private  capitalism.  But  nationali- 
zation will  help  industry  on  towards  its  goal  in  the 
Guildsmcn's  economic  order.  It  will  give  unified  manage- 
ment, but  It  will  precipitate  a"battle  between  bureaucracy 
and  freedom."  It  will  be  a  valuable  step  onwards,  but 
every  time  that  such  a  step  is  gained  the  workers 

must  present  a  definite  and  concrete  demand  for  a  share  in 
control.' 

*  Cole,  G.  D.  H.:  "Self-Government  in  Industry,"  p.  197.  See  the  argument 
of  pp.  198-225. 

'  Ibid.,  p.  252. 

'  Ibid.,  p.  221. 

ao 


In  view  of  this  attitude  it  is  interesting  to  observe 
that  the  miners'  scheme  for  the  control  of  the  coal  mines 
ran  along  similar  lines.  Mr,  William  Straker,  Secretary 
of  the  Northumberland  Miners'  Association,  and  a 
member  of  the  executive  committee  of  the  Miners'  Federa- 
tion of  Great  Britain  presented  the  scheme  before  the 
Coal  Commission  on  March  14,  1919.^  In  this  plan  the 
miners  asked  for  nationalization  and  joint  control.  They 
would  have  nothing  to  do  with  private  ownership.  That 
had  served  its  day  and  generation,  which  was  past.  They 
wanted  nationalization  in  order  to  do  away  with  private 
ownership.  But  they  did  not  want  bureaucratic  admin- 
istration; they  wanted  the  worker  to  have  a  share  in  the 
management  of  the  industry.  Hence,  they  proposed 
that  the  control  of  management  should  be  in  the  hands 
of  a  mining  council,  half  of  whom  should  be  appointed  by 
the  Miners'  Federation  of  Great  Britain.  In  this  case 
we  see  the  definite  advocacy  of  a  policy  like  that  suggested 
by  the  Guildsmen  as  a  step  towards  the  ultimate  goal, 
that 

the  state  should  own  the  means  of  production;  the  guild  should 
control  the  work  of  production.* 

The  aim  of  the  Guildsmen  is  the  expropriation  from  the 
present  owners  of  the  materials  of  production  from  both 
their  possession  and  control  and  from  control  also  of 
human  beings  through  the  wage  relation  and  the  abolition 
of  the  wage  system.  The  organizations  advocated  by 
the  National  Guilds  are  to  be 

self-governing  associations  of  workers  arising  out  of  the 
trade  unions  and  controlling  industry  in  conjunction  with  a 
democratized  state.^ 

They  are  to  constitute 

a  system  by  which  the  control  of  industry  might  be  shared 
between  the  organizations  of  producers  and  consumers,  so  as  to 
safeguard  the  interests  of  the  community  of  consumers  and 
at  the  same  time  to  give  the  workers  freedom  to  organize  pro- 
duction for  themselves.* 

This  organization  of  production  by  the  workers  is  to 
begin    in    the    workshop    and    the    factory.      Just    how 

^  See  The  Times  (London),  March  15,  1919,  p.  6. 

^  Cole,  G.  D.  H.:  "Self-Government  in  IndusUy,"  p.  109. 

» Ibid.,  p.  21. 

♦  Ibid.,  p.  6. 

391 


and  where  it  shall  begin  and  what  form  it  shall  take  are 
keen  subjects  of  debate  among  advocates  of  this  theory. 
The  chief  suggestions  are  that  the  workers  must  continue 
their  organization  till  they  have  a  complete  monopoly 
of  their  labor  power,^  and  must  then  begin  on  the  process 
of  detaching  the  managers,  foremen,  and  managing 
directors  alike,  from  dependence  on  capitalism  and 
attaching  them  as  allies  to  trade  unionism.  The  latter 
process  can  be  carried  out 

by  the  strengthening  of  trade  union  organization  in  the  work- 
shop, by  a  closer  and  closer  relating  of  trade  union  machinery 
to  the  organized  life  of  the  workshop,  and  by  the  gradual  win- 
ning over  from  capitalism  of  the  grades  of  supervision  and 
management,  beginning  with  the  wresting  by  Labour  from  its 
enemies  of  the  right  to  choose  and  control  foremen  and  supe- 
riors in  every  industry.^ 

In  general  it  is  recognized  that  the  workshop  must  form 
the  starting  point  of  control,  and  that  the  first  step  will 
be  the  replacing  of  the  employers'  foremen  by  the  workers' 
shop  stewards.  The  most  advanced  step  proposed  is  that 
of  the  collective  contract,^  whereby  the  employer  would 
pay  a  contract  price  to  a  certain  group  of  his  workers, 
who  would  carry  on  production  and  distribute  the  con- 
tract price  among  the  group.  The  workers  would  organ- 
ize themselves  into  a  "factory  fellowship"  to  settle  the 
details  of  the  work.  A  group  of  Guildsmen  at  Weymouth 
are  on  record  as  having  formulated  the  terms  of  such  a 
collective  contract.     These  are  as  follows:'^ 

1.  The  necessary  preliminary  would  be  the  election  of  the 
workers'  committee,  fully  representative  of  the  different 
trade  unions. 

2.  Individual  piecework  would  be  abolished  and  the 
committee  would  undertake  the  work  by  collective  contract. 

3.  Workmen  would  be  engaged  by  the  committee,  and 
the  hours  of  work  would  be  regulated  by  them.  In  like  man- 
ner apprentices  and  their  vocational  training  would  be 
under  the  entire  supervision  of  the  committee. 

It  is  the  idea  of  the  Guildsmen  that  by  such  measures 
the  control  which  the  capitalist  exercises  over  the  processes 
of  production  would  be  "atrophied." 

'  Hobson,  S.  G.:  "Guild  Principles  in  War  and  Peace,"  p.  159. 
'Cole,  G.  D.  H.:  "Self-Government  in  Industry,"  p.  173. 
*Gallachcr  and  Paton:  "Towards  Industrial  Democracy,  a  Memorandum  on 
Workshop  Control." 

*  The  Cuildsman,  March,  1918,  p.  2. 

392 


But  the  employer  has  also  control  of  "exchange," 
that  is,  of  finance,  and  this,  too,  must  pass  into  the  hands 
of  the  workers  before  Guild  ideas  can  be  realized.  The 
first  step  in  this  direction  will  probably  be  that  the  state 
will 

assume  the  role  of  banker,  financier,   and  merchant,  while 

labor  is  developing  its  control  of  production/ 

By  taxation,  and  by  the  control  of  banking,  and  of  home 

and  foreign  investments,  the  state  will  be  able  to  strike  at  the 

economic  power  of  capitalism.^ 

If  these  measures  of  industrial  and  political  action  do 
not  suffice,  there  remains  "the  remedy  of  the  catastrophic 
general  strike,"  which,  it  is  believed,  could  not  fail.  This 
step  is  described  as  "the  last  stage  of  the  coming  social 
revolution,"  and  as  one  that  can  be  successful  only  after 
long  preparation  and  actual  achievement  in  organization 
of  industry  and  in  control  of  production.  But  whatever 
the  method,  the  aim  of  the  Guildsmen  is  such  a  measure 
of  control  over  management  and  industry  as  will  realize 
their  ideal  of  industrial  self-government. 

The  Guildsmen,  however,  are  not  Syndicalists.  They 
agree  with  the  Syndicalists  in  their  demand  for  the  owner- 
ship and  operation  of  industry  by  the  workers.  They 
do  not,  however,  join  with  the  Syndicalists  in  their 
demand  for  the  abolition  of  the  state.  They  would 
retain  the  state  as  the  representative,  on  the  one  hand, 
of  civic  and  political  interests,  and,  on  the  other  hand, 
of  the  rights  of  the  consumer. 

The  workers  ought  to  control  the  normal  conduct  of  in- 
dustry; but  they  ought  not  to  regulate  the  price  of  com- 
modities at  will,  to  dictate  to  the  consumer  what  he  shall 
consume,  or,  in  short,  to  exploit  the  community  as  the  in- 
dividual profiteer  exploits  it  today.^ 

To  defend  the  rights  of  the  consumers,  and  to  control 
the  division  of  the  national  product,  a  democratic  state 
will  be  needed.  This  state,  however,  will  probably  be 
somewhat  different  from  that  which  exists  today,  for 

in  the  society  of  today  the  state  is  a  coercive  power,  existing 
for  the  protection  of  private  property,  and  merely  reflecting 
in  its  subservience  to  capitalism,  the  economic  class  structure 
of  the  modern  world.* 

1  Cole,  G.  D.  H.:  "Self-Government  in  Industry,"  p.  180. 

2  Ibid.,  p.  182. 


3  Ibid.,  p.  108. 
*  Ibid.,  p.  104. 


393 


The  preceding  analysis  has  tended  to  show  how,  in 
Great  Britain,  both  the  concept  and  the  form  of  property 
rights  are  altering.  The  tendency  is  undoubtedly  towards 
an  increase  in  the  extent  and  scope  of  state  ownership 
of  property  and  towards  greater  stress  on  the  concept  of 
public  interest  as  the  ultimate  justification  for  ownership, 
use,  and  control  of  all  property.  This  has  been  par- 
ticularly manifest  in  the  question  of  the  land.  While 
taxation  dealing  with  this  question  has  been  insignificant 
in  financial  returns,  the  discussion  which  centered  around 
these  measures  has  had  a  noticeable  effect  upon  the 
disposal  of  landed  property  and  upon  such  a  question  as 
the  ownership  of  mineral  deposits. 

In  the  taxation  of  the  war  period  there  has  been  a  re- 
striction of  property  in  the  sense  of  use  or  enjoyment,  and 
a  diversion  of  such  use  to  the  needs  of  the  state.  Through 
death  duties,  income  taxes,  and  excess  profits  duties,  men 
have  had  to  surrender  large  portions  of  what  they  had 
hitherto  enjoyed  full  use  of.  Along  with  this  surrender 
of  private  property  has  gone  a  demand  for  the  restoration 
to  society  of  direct  ownership  in  certain  things  held 
essential  for  the  development  of  the  "democratic"  state. 
This  demand  for  national  ownership  and  administration 
was  coupled  with  a  further  demand  for  restriction  of 
property  in  the  sense  of  control.  Without  leading, 
necessarily,  towards  confiscation  of  private  property,  this 
movement  does  involve  the  curtailment  of  private  pro- 
perty, and  has  become  one  for  the  sharing  of  control  with 
those  who  previously  were  themselves  in  the  control  of  the 
property  owner. 


394 


CHAPTER  XXV 
FINDINGS  OF   EUROPEAN   COMMISSION 

Your  Commission  has  summarized  here  the  essential 
points  of  its  findings  from  a  study  of  the  industrial  and 
labor  problems  in  Great  Britain,  France,  and  Italy.  The 
reader  with  little  leisure  will  be  able  to  get  from  these 
the  gist  of  the  complete  discussion  within  small  compass. 
It  is  also  possible  to  identify  readily  the  points  of  particu- 
lar interest  and  to  turn  at  once  to  a  fuller  treatment  of 
them.  These  findings  can  in  no  way  take  the  place  of 
the  complete  text;  they  can  serve  only  as  a  summary. 

§  1.     Industrial  Unrest 

Your  Commission  found,  in  the  countries  visited,  the 
social  and  economic  bases  of  industry  shaken  to  their 
foundations.  The  war  had  wrought  great  changes  in 
industrial  organization,  in  state  control,  in  finances,  in 
the  distribution  of  wealth,  in  social  groups.  A  readjust- 
ment to  peace  conditions  in  all  phases  of  life  was  being 
found  a  difficult  task.  There  was  widespread  discontent, 
particularly  among  the  laboring  classes,  due  mainly  to 
the  long  strain  of  the  war,  the  nervous  effect  produced 
by  the  extreme  industrial  efforts  of  the  nation,  the  dis- 
turbance of  normal  economic  life,  the  rise  in  the  cost  of 
living,  and  to  the  absorption  of  ideas  from  the  revolution- 
ary movements  of  Europe.  In  this  condition  of  unsettle- 
ment  radical  labor  leaders  were  growing  bolder  and  were 
increasing  their  following.  Catchwords  and  slogans, 
such  as  "nationalization,"  "collective  bargaining,"  "demo- 
cratization of  industry,"  of  wide  appeal  but  of  vague 
and  uncertain  import,  were  being  used  as  rallying  cries. 
It  is  with  a  vision  of  these  peoples  in  mind,  painfully 
struggling  back  to  a  tolerable  working  relationship,  that 
your  Commission  presents  its  analysis  of  this  situation.^ 

§  2.     Efficiency  of  Production 

The  industrial  situation  in  Great  Britain  has  been 
aggravated    by    long    years    of    the    fallacious    economic 

*  For  a  full  discussion  of  these  points,  see  Chapter  I,  Introduction,  pp.  1-19. 

395 


teaching  among  the  workmen,  that  restricted  output 
was  necessary  to  avoid  unemployment,  and  by  long  years 
of  neglect  of  their  employees  by  British  employers.  The 
labor  unions  had  imposed  upon  many  plants  a  "network 
of  restrictions"  which  they  were  very  reluctant  to  have 
removed  even  in  the  war  emergency,  and  even  with  a 
guarantee  of  their  restoration.  It  is  now  being  found 
neither  possible  nor  desirable  to  restore  them,  and  labor 
is  using  this  fact  as  a  basis  for  new  bargaining.  This 
situation  does  not  exist  in  France,  where  there  is  a  shortage 
of  labor,  or  in  Italy,  where  unions  are  not  strong  and  where 
agriculture,  as  in  France,  is  the  chief  industry.  In  all 
countries  similar  systems  of  war  bonuses  to  stimulate 
production  and  to  meet  increasing  cost  of  living  existed. 
There  was  a  universal  demand  by  labor  for  these  war 
bonuses  to  be  made  a  permanent  part  of  peace-time  wages. 
Piecework  is  the  prevailing  method  of  payment  where 
the  nature  of  the  work  permits.  The  demand  for  high 
speed  production  during  the  war  awakened  a  great 
interest  in  the  principles  of  scientific  management  in 
Great  Britain,  France,  and  Italy.  Objection  to  the 
introduction  of  such  principles  is  encountered  on  the 
part  of  British  labor;  French  labor  welcomes  all  labor- 
saving  devices  that  will  increase  production,  provided  it 
may  have  some  voice  in  the  way  they  are  to  be  used; 
Italian  labor  feels  their  desperate  need  for  an  increase 
in  output  and  will  co-operate  in  new  methods.  America 
has  had  a  clear  superiority  in  the  use  of  machines  and  in 
large  scale  production.  The  industrial  awakening  in 
western  Europe,  however,  must  not  be  underestimated.^ 

§  3.     Management 

Organized  labor  in  Europe  is  making  a  loud  demand 
for  a  new  "industrial  order."  There  is  in  this  demand  a 
direct  challenge  to  the  existing  "capitalistic"  system. 
Organized  labor  is  demanding  a  share  in  management. 
In  the  criticisms  launched  against  the  present  system 
there  is  much  confusion  of  mind  as  to  the  economic 
function  of  management  in  which  labor  desires  to  share. 
Managerial  functions  include  buying  materials,  mastery 
of  technical  processes,  selling  the  product,  financing  the 
undertaking,  organizing  the  factors  of  production.  The 
manager  is  a  labc^rer  himself.     In  the  corporate  form  of 

'  Full  discussion  in  Cliaplcr  II,  i)p.  20-43. 

.390 


organization  the  directors  are  managers.  No  group  has  a 
monopoly  on  managerial  ability,  which  is  largely  innate; 
it  is  and  should  be  drawn  from  all  walks  of  life.  Its 
rewards  are  largely  the  result  of  a  scarcity  of  the  required 
ability.^ 

§  4.     Unionism 

The  ranks  of  trade  unionists  have  been  augmented  dur- 
ing recent  years  in  all  countries  visited,  but  especially  in 
Great  Britain,  where  there  are  upward  of  five  and  a  half 
million  members  out  of  an  estimated  possible  strength  of 
fourteen  millions.  There  is  a  concentration  of  union 
organization  in  the  basic  industries,  such  as  coal  mining, 
shipbuilding,  textiles,  and  engineering,  which  account 
for  one  half  of  the  total.  While  there  is  in  British  labor 
unions  a  decided  tendency  toward  consolidation  and  unity 
through  amalgamation  and  absorption,  as  in  the  Triple 
Alliance,  there  is  still  much  "explosive  power"  within 
them.  This  is  demonstrated  by  the  recent  "unauthorized 
strikes"  and  the  development  of  independent  assertiveness 
in  the  "rank  and  file  movement."  On  the  surface,  the 
attitude  of  British  labor  is  truculent,  bellicose,  and  unruly; 
extravagant  demands  are  being  made  without  regard  to 
economic  considerations,  as  in  the  coal  industry.  The 
British  public,  and  many  employers,  believe  that  the  mass 
of  laboring  men  can  be  relied  upon  for  conservative,  well- 
considered  action.  British  organized  labor  wants  col- 
lective bargaining  in  the  sense  of  a  recognition  of  the 
union,  and  does  not  want  compulsory  conciliation  and 
arbitration.  The  miners  refused  to  agree  not  to  strike 
even  during  the  war.  Strikes  and  disputes  were  on  the 
increase  during  the  last  two  years  of  the  war  and  have 
been  more  numerous  since  the  armistice.  Practically 
all  the  British  employers  interviewed  were  opposed  to 
complete  unionization  on  principle,  even  though  they  had 
accepted  union  restrictions  in  the  shops.  Employers' 
associations  have  repeatedly  declared  themselves  to  be 
ready  and  willing  to  deal  with  associations  of  employees. 
Unionization  is  apparently  encouraged  by  the  state  for 
practical  and  for  political  purposes.  British  employers 
have  a  newly  awakened  interest  in  their  labor  problems 
and  are  in  the  mood  to  do  much  to  make  labor  conditions 
better.^ 

1  Cf.  Chapter  III,  pp.  44-62. 
^  Full  discussion,  Chapter  V,  pp.  63-98. 

397 


§  5.     Employers'  Organizations 

British  employers  have  been  driven  to  put  aside  much 
of  their  individuaUsm  and  to  get  together  during  the 
war.  The  Government  is  now  encouraging  this  ten- 
dency for  after-the-war  trade  with  such  results  as  may 
be  seen  in  the  shipbuilding  and  marine  engineering  in- 
dustries. There  has  been  a  considerable  development 
also  along  the  line  of  employers'  associations  with  the  ma- 
chinery for  dealing  with  both  trade  and  labor  problems. 
The  same  forces  are  at  work  in  France  and  Italy.  Ameri- 
can business  men  should  watch  this  trend. ^ 

§  6.     Shop  Stewards  and  Works  Committees 

A  great  change  has  come  in  the  position  of  shop  ste- 
wards. In  their  origin  the  shop  stewards  began  as  trade 
union  delegates  to  watch  over  the  observance  of  union 
rules  regarding  the  details  of  workshop  conditions.  With 
the  opening  of  the  shop  doors  to  great  numbers  of  semi- 
skilled and  unskilled  workmen,  they  took  on  new  func- 
tions; they  began  to  build  up  their  own  following,  and, 
with  increased  power,  demanded  official  recognition  by 
the  unions.  The  shop  stewards  were  desirous  of  becoming 
shop  foremen  in  functions  and  to  be  the  official  repre- 
sentatives of  the  unions.  So  radical  were  these  shop 
stewards,  so  dangerous  in  their  ambitious  leadership,  so 
extravagant  in  the  demands  for  control,  that  the  em- 
ployers were  driven  to  aid  the  unions  in  subduing  them. 
Coventry  has  been  the  hotbed  of  the  shop  steward  move- 
ment, where  the  great  strikes  of  1916  and  1917  were 
engineered  by  them.'^ 

The  British  Works  Committee  is  an  organization,  with 
the  shop  as  the  unit,  which  affords  the  machinery  for 
bringing  employers  and  workmen  together  for  the  dis- 
cussion of  their  common  problems.  These  are  of  recent 
origin.  They  have  three  types  of  functions:  (1)  Social 
union  committees,  (2)  welfare  committees,  and  (3) 
industrial  committees.  Only  the  last  type  is  of  im- 
portance here.  They  have  functioned  badly  or  well 
according  to  the  spirit  that  animated  each  side.  Some 
sort  of  machinery  for  a  full,  free,  and  frank  discussion 
of  common  problems  is  necessary.  They  arc  a  means  to 
an  end,  not  a  panacea.'^ 

'  Full  discussion,  see  Chapter  VI,  pp.  94-122. 
*Sec  Chapter  VII,  pp.  123-1:^7. 
'See  Chapter  VIII,  pp.  138-150. 

398 


§  7.     Eight-Hour  Day  and  Minimum  Wage 

There  is  a  movement  in  Europe,  as  well  as  here,  to 
standardize  and  to  constitutionalize  by  governmental 
action  the  length  of  the  workday  and  a  minimum  wage. 
A  law  was  passed  by  the  French  Chamber  of  Deputies, 
on  April  18th,  establishing  the  principle  of  an  eight-hour 
day  and  leaving  its  application  to  each  industry  to  the 
Minister  of  Labor.  The  former  workday  was  10  or  10}^ 
hours.  The  same  thing  was  being  agitated  in  Italy.  In 
England  the  demands  were  not  only  for  an  eight-hour 
day,  a  44-hour  week,  but  the  miners  were  demanding  a 
six-hour  day  with  a  five-day  week.  The  work  week  in 
England  has  hitherto  centered  around  54  hours.  It  is 
contemplated  that  there  shall  be  no  reduction  in  wages, 
and  that  the  war  bonuses  will  be  incorporated  in  the 
peace-time  wage.^ 

The  principle  of  the  minimum  wage  has  come  to  have 
increasing  importance  in  all  countries  visited.  In  Eng- 
land the  minimum  wage  was  first  applied  to  "sweated" 
trades,  but  now  extends  not  only  to  poorly  paid  industries, 
where  a  large  proportion  of  the  workers  are  women,  but 
also  to  miners  and  agricultural  laborers.  There  is  machin- 
ery for  its  extension  in  the  Trade  Boards  Act  of  1918,  and 
there  is  evident  the  spirit  to  do  so,  in  the  report  of  the 
Joint  Committee  of  the  National  Industrial  Conference, 
April  4,  1919.  A  minimum  wage  law  passed  the  French 
Senate  and  became  operative  July  10,  1915.  It  is  not  a 
war  measure  and  is  to  be  administered  by  wage  boards 
in  each  Department.  The  question  of  a  minumum  wage, 
though  agitated  along  with  the  eight-hour  day,  had  not 
reached  a  climax  at  the  time  your  Commission  visited 
Italy.2 

§  8.     Unemployment 

There  were  "unemployment  donations"  in  Great 
Britain,  France,  and  Italy  for  demobilized  soldiers  and 
for  civilian  war  workers  thrown  out  of  employment. 
The  donation  in  Great  Britain  ran  up  to  29  shillings  per 
week  for  adult  men  and  25  shillings  per  week  for  adult 
women.  Its  application  followed  the  principles  in  the 
apportioning  of  trade  union  benefits  to  secure  some  check 
on  the  unemployed.     The  peak  of  the  load  for  unem- 

1  See  Chapter  IX,  pp.  151-169. 

2  See  Chapter  X,  pp.  170-179. 

399 


ployment  came  in  May;  for  soldiers,  May  9,  409,959,  for 
civilians,  683,441;  total  1,093,400.  A  sum  of  £25,000,000 
had  been  set  aside  for  this  purpose,  and  when  the  numbers 
were  highest  there  was  an  estimated  expenditure  of 
£1,000,000  per  week.  It  was  a  war  expediency  and  pro- 
bably with  all  its  faults  helped  to  allay  some  discontent.^ 

§  9.     Housing 

Another  social  problem,  like  unemployment,  is  the 
housing  problem.  In  France  and  Italy  this  is  a  matter 
for  reconstruction,  but  in  England  it  had  to  do  with 
industry.  The  total  number  of  houses  called  for  in  Great 
Britain,  including  new  houses  and  those  to  replace 
existing  insanitary  structures,  does  not  fall  far  short  of 
a  million.  The  Government  authorized  the  expenditure 
of  £4,000,000  by  the  Housing  Act  of  1914;  regulated 
rents  by  acts  in  1915  and  1917.  To  direct  post-war 
building  is  the  House  and  Town  Planning  Act  of  1919. 
The  British  Government  stands  ready  to  initiate  the 
building  and  to  furnish  the  capital  and  to  sell  on  long,  easy 
terms. ^ 

§  10.     Co-operative  Movement 

There  is  a  recent  development  among  the  co-operative 
societies  in  Great  Britain  that  is  of  considerable  interest. 
This  is  the  new  relation  between  the  trade  unions  and 
the  co-operative  societies  when  the  latter  have  put  their 
financial  resources  at  the  disposal  of  the  former.  Many 
workingmen  were  already  members  of  the  societies,  and 
this  was  an  appeal  to  secure  a  large  clientele.  A  liaison 
has  been  established  between  British  and  Russian  co- 
operative societies.  The  societies  were  driven  into  politi- 
cal action  by  the  attempt  of  the  Government  to  apply 
the  excess  profits  tax  to  them.  They  will  become  a  branch 
of  the  Labour  Party. ^ 

§  11.     Political  Labor  Movement 

Your  Commission  found  the  labor  situation  in  western 
Europe  shot  through  and  through  with  political  influences. 
Labor  organizations  and  socialist  parties  naturally  overlap 
to  a  very  great  extent   in    membership,  socialist   parties 

'  Sec  Chapter  XI,  pp.  180-100. 
2  Sec  Chapter  XII,  pp.  101-200. 
•Sec  Chapter  XI 11,  pp.  201-211. 

400 


looking  to  workpeople  for  their  chief  clientele.  Con- 
versely, trade  unions  have  taken  over  the  socialistic 
teachings  and  have  shaped  their  programs  to  secure  a 
socialistic  order  of  society. 

{a)  The  Labour  Party  of  Great  Britain  has  taken  the 
lead  in  an  international  movement  for  a  "new  social 
order,"  which  involves  "the  universal  enforcement  of 
the  national  minimum  wage,  the  democratic  control  of 
industry,  a  revolution  in  national  finance,  and  the 
taking  of  surplus  wealth  for  the  common  good."  Their 
boldly  expressed  determination  is  to  secure  for  the 
workers  a  larger  and  larger  control  over  the  management 
of  industry. 

{h)  The  British  Government  has  encouraged  the 
organization  of  workmen  in  order  to  have  a  responsible 
party  with  whom  to  deal  in  case  of  emergency.  There 
has  been,  too,  an  element  of  "politics"  in  its  advocacy 
of  the  Whitley  Plan  for  district  and  national  trade 
councils,^  and  many  employers  have  been  compelled  to 
accept  such  unnecessary  machinery  through  Govern- 
ment pressure. 

(c)  When  the  Triple  Alliance  issued  its  ultimatum, 
threatening  to  tie  up  all  British  industry  if  their  de- 
mands were  not  granted,  a  National  Industrial  Con- 
ference was  called  by  the  Prime  Minister  to  avert 
the  crisis.  It  was  a  temporarily  successful  move, 
but  the  danger  still  threatens. - 

{d)  In  France,  the  labor  situation  is  much  easier, 
even  though  the  General  Confederation  of  Labor  is 
committed  to  a  radical  program  and  has  been  fomenting 
trouble  through  local  and  general  strikes.  France 
had  a  shortage  of  labor  before  the  war,  and  with  the 
terrible  war  losses  there  will  be  a  much  more  serious 
deficiency  now.  French  workmen  are  not  organized 
more  than  20  per  cent,  of  possible  strength.  It  was 
the  consensus  of  opinion  among  those  interviewed 
that  if  raw  materials  and  coal  can  be  had  and  the 
financing  of  manufacturing  operations  can  be  secured, 
there  will  be  no  serious  labor  trouble.  France's  indus- 
trial problem  is  one  of  finance.  Hers  is  a  people 
of   property    and    bondholders;    though  it   is  the  hot- 

1  Cf.  Chapter  XVI,  pp.  235-257. 

2  Cf.  Chapter  XVII,  pp.  258-271. 

401 


bed  of  revolutionary  ideas,  there  seems  now  no  dan- 
ger of  Bolshevism  gaining  headway.^ 

(e)  In  Italy  labor  is  restless,  though  not  highly 
unionized.  It  is  divided  into  conflicting  sections, 
whose  difi'erentiation  has  been  due,  historically,  to 
political  attitudes. - 

(f)  A  politico-industrial  movement,  that  is,  a  move- 
ment to  secure  industrial  results  through  political 
activity,  has  become  international.  New  machinery 
has  been  proposed  as  a  part  of  the  treaty  of  peace  at 
Paris  in  the  International  Labor  Office.  The  announce- 
ment of  the  so-called  "Bill  of  Rights"  of  organized 
labor,  which  has  been  included  in  the  treaty,  is  also 
of  world-wide  political  influence.^ 

§  12.     Nationalization 

In  Europe  generally,  and  especially  in  Great  Britain, 
there  has  arisen  a  demand  for  nationalization  of  various 
industries.  This  is  not  merely  a  demand  for  national 
ownership  but  also  one  for  national  administration, 
generally  with  some  measure  of  control  on  the  part  of 
the  workers.  For  this  latter  development  the  teaching 
of  the  National  Guildsmen  may  be  held  responsible."* 

§  13.     Coal  Industry 

In  the  case  of  the  coal  mines  of  Great  Britain  there 
was  considerable  opposition  to  nationalization.  This 
was  based  on  the  following  grounds: 

(a)  Government  control  would  be  more  costly  and  in- 
efficient. Though  profits  were  large  during  the  war  the 
normal  margin  is  too  small  to  allow  for  much  inefficiency. 

(h)  The  present  system,  though  not  without  faults,  has  a 
past  record  of  business-like  development.  Its  faults  can  be 
cured  by  economies  and  the  fuller  use  of  machinery. 

(c)  The  alarming  reduction  in  output  is  not  to  be  cured  by 
government  ownership.  It  is  doubtful  if  the  economies  and 
machinery  referred  to  could,  under  private  ownership,  offset 
the  reduction  in  output  manifest  during  recent  years  and 
resulting  from  the  installation  of  shorter  hours. 

'  Cf.  Chapter  Will,  pp.  272-292. 
*  Cf.  Chapter  XIX,  pp.  29:}-:i()7. 
»  Cf.  Chapter  XX,  pp.  :i()S-.S27. 
*Cf.  Chapter  XXI,  pp.  [i'lH-M'Z. 

402 


(d)  Nationalization  seems  directed  less  to  secure  the 
national  welfare  than  to  give  the  miners  a  larger  share  in  the 
control  of  the  industry.  The  latter  aim  can  be  secured  with- 
out nationalization.^ 

§  14.     Key  Industries 

The  bitter  experience  of  Great  Britain  during  the  war 
when  she  found  herself  cut  short  of  a  supply  of  essential 
materials  for  food,  clothing,  and  munitions,  started  a 
general  movement  for  national  control  of  "key"  or 
pivotal  industries.  The  principle  back  of  this  movement 
and  announced  at  the  Paris  Conference  of  1916,  is  to 
make  the  nation  independent  in  the  matter  of  materials 
needed  for  its  defense  and  well-being.- 

§  15.     Property  Rights 

The  rights  of  private  property  have  been  undergoing 
a  modification  within  recent  years.  Extension,  during  the 
war,  of  government  control,  the  widespread  use  of  the 
power  to  commandeer,  has  quickened  these  changes. 
Legislation  on  income  taxes,  on  inheritance  taxes,  on 
excess  profits  taxes,  the  requisition  of  securities,  the 
demands  for  a  levy  on  capital,  for  an  increased  share  in 
management,  for  nationalization,  for  "land  reform,"  in 
Great  Britain,  are  manifestations  of  these  changes.  The 
most  significant  element  in  these  changes  is  the  demand 
of  labor  for  a  new  social  order,  and  by  the  labor  group, 
called  Guildsmen,  who  preach  the  doctrine  of  a  demo- 
cratic industrial  state. ^ 

§  16.     Points  to  be  Emphasized 

Your  Commission  calls  especial  attention  to  the  follow- 
ing significant  facts: 

(a)  Many  phrases  used  in  the  discussion  of  industrial 
problems  abroad  had  acquired  radical  meanings. 
Furthermore,  the  old  terminology  of  labor  discussion 
has  likewise  taken  on  new  and  radical  meanings  which 
have  a  dangerous  portent  for  orderly  and  peaceful 
industrial  development.  Alany  of  these  phrases  were 
being  used  for  propaganda  purposes. 

1  Cf.  Chapter  XXII,  pp.  343-372. 

2  Cf.  Chapter  XXIII,  pp.  373-381. 
'Cf.  Chapter  XXIV,  pp.  382-394. 

403 


{h)  In  the  political  activities  of  organized  labor  there 
was  developing  a  strong  radical  force  under  the  control 
of  ambitious  and  irresponsible  leaders  which  seemed 
likely  to  prove  a  great  menace  to  property  and  industry. 

(c)  The  preaching  of  socialistic  doctrines,  persistent, 
aggressive,  irresponsible,  for  selfish  purposes,  is  having 
its  effect  upon  the  organized  workers.  The  forces 
which,  undirected  or  wrongly  directed,  have  brought 
the  industries  of  Great  Britain  to  such  a  critical  con- 
dition, should  not,  by  our  careless  passiveness,  be 
permitted  to  produce  the  same  effects  upon  our  own. 

{d)  It  is  not  this  or  that  kind  of  machinery  for  bringing 
employers  and  workmen  together,  but  the  true  spirit  of 
fair,  frank  co-operation,  that  will  resolve  the  industrial 
problems  of  today. 

{e)  American  employers  should  become  aware  of  the 
fact  that  many  of  the  immigrants  to  this  country 
from  Europe  have  had  experience  in  unionism  and 
training  in  socialistic  or  more  radical  doctrines,  in 
sabotage  or  "ca'canny"  methods. 

(/)  American  manufacturers  should  not  err  in  under- 
estimating the  industrial  awakening  in  Great  Britain, 
France,  and  Italy,  due  to  the  demand  for  high  speed 
production  during  the  war.  New  methods,  new 
machinery,  greater  energy  and  intelligence  will  un- 
doubtedly characterize  the  after-war  competition  in 
foreign  markets. 

ig)  All  the  influences  that  have  been  making  difficult 
the  readjustment  to  peace  conditions  abroad  are  work- 
ing into  our  own  industrial  system.  The  outcome  of  the 
wrong  point  of  view  in  Europe  should  serve  as  a  warning 
to  keep  industry  in  the  United  States  from  drifting  into 
the  same  difficulties. 

ih)  New  forces  have  been  let  loose  upon  the  political, 
social,  and  industrial  world.  Industrial  changes  are 
inevitable  and  arc  desirable  or  undesirable  according  to 
whether  they  make  for  orderly  progress,  better  well- 
being  for  all,  or  whether  they  become  disruptive, 
revolutionary,  obstructive,  and  perverted  to  selfish 
ends.  The  danger  of  this  latter  outcome  does  not  lie 
wholly  within  any  one  group,  neither  wholly  among 
workpeople  nor  wholly  among  employers. 

404 


{{)  There  was  much  being  said  in  Great  Britain  about 
the  importance  of  certain  essential  industries,  called  the 
key,  or  pivotal,  industries.  Organized  labor,  likewise, 
was  coming  to  look  upon  itself  as  being  in  a  strategic 
position  to  control  industry,  and  certain  workmen 
were  coming  to  look  upon  themselves  as  key  men  whose 
activities  were  essential  to  industrial  activity.  An 
illustration  of  this  can  be  found  in  the  expressions  of  the 
leaders  of  the  Triple  Alliance.  It  is  true  that  in  our 
interlocking  industry  certain  men  are  essential  to  con- 
tinuous activity.  It  is  likewise  true  that  certain 
material  may  be  pivotal,  or  a  certain  industry,  or  a 
certain  machine.  All  talk  about  the  essential  character 
of  the  workman  is  both  unfortunate  and  unwise.  In 
a  great  co-operative  industry  like  ours,  almost  any 
element  may  become  pivotal.  Successful  development 
can  be  achieved  only  by  a  recognition  of  this  fact  and 
by  a  harmonious  co-operation  on  the  part  of  all  those 
engaged  in  it. 

(J)  Without  doubt  the  main  recommendation  of  your 
Commission  to  American  industrialists,  after  its  examina- 
tion of  conditions  abroad,  is  that  each  employer  should 
regard  it  as  his  personal  duty  to  establish  direct  and 
cordial  relations  with  his  workers.  It  will  not  do  to 
drift  into  a  policy  of  neglect,  as  have  some  British 
employers  in  the  past,  which  has  borne  such  bitter 
fruit  in  the  dissatisfaction  of  the  present  day.  The 
employer  must  see  to  it  that  no  charge  can  be  brought 
against  him  of  not  intelligently  looking  out  for  the 
interests  of  the  rank  and  file  in  his  establishment. 
Everything  depends  upon  the  spirit  of  humanity  and 
sympathy  which  animates  both  parties  to  the  wages 
contract.  First  of  all,  more  is  expected  of  the  fortunate 
and  successful,  because  of  noblesse  oblige,  than  of 
those  who  have  had  less  opportunity  and  success. 
The  employer  must  take  the  lead;  much  in  the  way  of 
leadership  is  expected  of  him.  He  must  generally 
plan  to  prevent  grievances  from  rising  by  showing  a 
genuine  interest  in  a  fair  system  of  remuneration,  in 
healthful  shop  conditions,  the  proper  and  sanitary 
housing  of  his  workers,  and  the  welfare  of  the  commun- 
ity in  which  his  plant  is  located.  If  he  is  really  at  heart 
trying  to  raise  the  standard  of  living,  as  he  ought,  of  his 
employees,  he  should,  moreover,  be  occupied  not  only 
with    questions    of    wages    or    material    rewards,    but 

405 


with  matters  which  will  cultivate  the  intelligence, 
morals,  and  character  of  men.  Granting  this  attitude 
of  mind,  then,  there  must  be  a  corresponding  point  of 
view  on  the  part  of  labor  if  any  permanent  and  peaceful 
adjustment  is  to  be  accomplished. 

{k)  It  is  to  be  kept  in  mind  that  there  seems  to  be  no 
organized  effort  to  combat  the  effects  of  the  long- 
continued  teaching  of  socialism  which,  as  we  have  seen, 
now  colors  the  opinion  of  the  more  extreme  labor 
leaders.  More  elementary  teaching  is  needed  to  show 
that  capital  is  as  essential  to  industry  as  labor,  and  that 
capital  is  the  one  factor  of  production  which  assumes 
practically  all  the  risks  of  uncertainty  and  loss.  Nor  is 
it  realized  how  moderate  are  the  actual  returns  to 
capital  itself,  and  how  large  a  part  of  what  is  loosely 
termed  "profits"  is  a  return  to  services  of  management 
which  is  open  to  any  laborer  having  executive  ability. 
In  the  careless  thinking  of  the  day  certain  groups  of 
men  have  just  discovered  that  they  are  essential  to 
the  employment  of  other  men  in  industry,  wholly 
oblivious  that,  as  distinguishing  modern  from  primitive 
production,  co-operation  between  all  kinds  of  workers 
is  essential  to  obtaining  our  daily  satisfactions.  Due 
to  this  very  characteristic  of  interwoven  co-operation, 
with  its  complex  of  division  of  labor,  only  are  men  able 
to  wring  products  from  nature  which  enables  us  to 
maintain  our  present  standards  of  living.  In  short,  on 
these  and  many  other  economic  questions,  your  Com- 
mission wishes  to  emphasize  the  need  of  education  on  a 
scale  and  of  a  quality  not  hitherto  understood.  It  would 
be  impossible  to  exaggerate  the  magnitude  of  the  educa- 
tional problem  facing  our  whole  social  and  industrial 
future.  It  is  impossible  for  our  proper  safety  to  accept 
supinely  the  tendency  which  introduces  a  policy  of 
force  into  the  relations  of  employer  and  worker,  and 
of  political  action  on  economic  matters,  which,  if 
allowed,  are  fated  not  only  to  corrupt  our  politics  but 
also  to  destroy  our  industrial  prosperity. 


406 


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